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spendthrift trust

What is the “spendthrift provision” in a Trust?

By Estate Planning, Probate

Florida’s spendthrift provision protects Trustees and beneficiaries from creditors seeking to collect on a beneficiary’s debts and from the beneficiaries themselves, pledging their interest in the Trust as collateral. Essentially, the provision stipulates that no creditor can access the assets in a Trust designated to be distributed to certain beneficiaries, as long as the assets remain in the Trust. However, as soon as the beneficiaries receive their assets from the Trust, the creditors are allowed to seek repayment from them.

For more information about the spendthrift provision, you can look up Florida Statute §736.0502 at www.leg.state.fl.us/Statutes. To review an existing Will or Trust or for help creating one, please contact the attorneys at Bach, Jacobs & Byrne, P.A. at (941) 906-1231.

 

January 22, 2019
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What is a Spendthrift Trust and Should I Consider Implementing One for My Troubled Child?

By Asset Protection Planning, Estate Planning

A spendthrift trust is a trust created for an individual that gives an independent trustee full authority regarding how the trust funds may be spent to meet the needs of the beneficiary (the individual receiving assets from the trust). In this situation, the beneficiary of the trust is not allowed to spend the money until they receive distributions and the trustee has determined what payments are necessary according to the trust agreement. A spendthrift trust can be a powerful estate planning tool if you have a troubled child who you still want to provide for after you pass away, but who you do not believe has the capability to make sound financial decisions. A spendthrift trust is generally used in situations where a child is troubled, has an addiction problem, is irresponsible with spending, or has credit problems. A spendthrift trust is a way to control an individual’s spending of the money you have left them and alleviates the stress or worry you may feel about a having the assets you worked so hard to obtain being wasted. It also allows you to avoid going through the uncomfortable process of having to disinherit a child whom you don’t trust with money because you know, if given free reign, they will waste it or spend it on unsavory items.

 

March 6, 2018
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