Spendthrift Trust For Those You Don't Trust

By: Joseph Warner

It is said that the first generation makes it, the second generation manages it and the third generation looses it.

I have found that to be somewhat true for various reasons.

No matter how hard we try to protect them, no matter how hard we try to teach them, no matter how many times we have specific conversations, sometimes members of our family simply do not think like we do.

We spend our lives protecting them and our assets and now it seems we need to continue to think about their lack of financial alertness even after death.After all, we don't want to work our assets off and then have our money spent in one giant beach party bonanza.

We want to know that our children and grandchildren are efficiently and effectively provided for.We want to know that our heirs will have food shelter and clothing.We want to be assured of this.

But, if your family is like many families, the monies would be gone as quickly as a dandelion blowing in the wind.

If you simply made your children the beneficiaries upon your death, the lump sum of money would be squandered in a matter of a few months, maybe years.

What would our heirs have to show for their free spending?Maybe their name on a hospital for a generous grant?

Maybe a new, necessary charity?Maybe a library?More than likely a massive hangover and the lament for years to come, "if I only that money now". So, how do you really protect yourself?How do you really share your money to be certain that your blood relatives will have the opportunity to also reap what you've sowed?How do you continue to take care your family after your death?

The answer, possibly by creating a Spendthrift Trust.

A Spendthrift Trust is an instrument by which your heirs are allowed "a little at a time" as long as they live.

We all know that a spendthrift is someone who goes through money like water.If they've earned the money, it is not up to us as to how they should spend it, although we cannot seem to keep our opinions to ourselves.It is up to the individual who makes the money as to how the money should and needs to be spent.

It is an instrument by which we, the Grantor has full say as to who receives how much money and when and for what.It is a means for those who want to be certain that other's who don't have the same financial values and where-with-all are financially taken care of.

A Spendthrift Trust is a guarantee that your not so savvy heirs will still be aided by your savvy forethought.

Put simply, it is a means for you to know that your family will not starve, will have a roof over their heads and have the opportunity for education.All without the fear of a creditor or bankruptcy taking away the Trust's assets.

We know how hard it to "make" it.We all know how hard it is to have a job, let alone a career.And most of all, we all know the fear of someone taking it all away.

In a Spendthrift Trust you have the opportunity to specify on what the money from the Trust is to be spent.For example, you can specify that the money is to be used for rent, medical, educational expenses, tuition, etc.You may also allow for a specific amount per month as specified in the Trust for living expenses, school related expenses, etc.

As history has also shown us, Spendthrift people in general have financial problems.

So, wouldn't it be awful if you worked your entire life to have a "nice" life, home and family and then you die and your money goes to a group of creditors?Your darn right it would be.

Most of our business lives are spent pondering how to use and save all of our hard earned cash and assets.Most of us have scrimped and gone without.So to have either our loving, yet financially impaired or ignorant, or the lawyers and creditors get our rewards, would be a nightmare.

With a Spendthrift Trust, creditors are able to stake claim to the Beneficiaries' monthly allowance, but they are not allowed to claim that the Spendthrift Trust is an asset.

The wording in the Trust needs to have an alienation decree with restrictions and transfer restriction placed upon the beneficiary in order to be effective.Be certain to check the 541 C(2) Bankruptcy Code for further guidance.

As an interesting aside, some states have a Spendthrift Trusts where the Grantor is also the Beneficiary.These are called Self Settled Spendthrift Trusts.Only a few states have them such as Alaska, Nevada and possibly Delaware.

Certain states have certain minimums and maximums, be certain to check your states requirements as to how much is allowable for creditors, monthly and in the overall Spendthrift Trust.

So, if you have heirs who, just for one reason or another, don't see business and finance the same way you do, look into the Spendthrift Trust.It may the answer of helping those who can't help themselves.

It will also insure that no one ever forgets you.They may curse you or praise you, but your future generations will indeed have the clear understanding that your family and your finances were an important aspect of your life.

It may also insure that your family, for generations to come, will, at the least, enjoy life, knowing that their rent and education has been, at least partially, taken care of and paid for.And what a relief that could be.

Spendthrift Trusts.It really may be worth a look.

---

Add this page to your favorite Social Bookmarking websites