Contact Us: 866-454-2281

Protect your heirs with a spendthrift trust

People in California who have a large estate need to think about what may happen to their wealth upon death. Even though you may have named beneficiaries, you need to ask whether they are responsible individuals. Too many times, those who receive a lot of money from a trust do not know how to spend it wisely, and it can disappear very quickly. If this may be the case in your situation, consider setting up a spendthrift trust to protect your heirs and your wealth.

According to Forbes, a spendthrift provision provides the trustee with directions as to when and how to distribute the funds. In most cases, the named beneficiaries are given a certain amount of money to live on but they are not able to access the entire sum of the trust. These distributions may continue throughout the heir's lifetime, or the remainder of the funds may be released once the heir reaches a certain age. This helps protect the beneficiaries from spending too much too fast or using it for bad habits such as alcohol or drugs.

According to the Huffington Post, certain language needs to be used when creating a spendthrift trust. The document should include the word 'spendthrift' as well as state its intention. Specific directions need to be outlined for the trustee as to the payments and timing of the fund distribution. There should be provisions against seizure to satisfy debts of the beneficiary and against the transfer of the trust's funds by the beneficiary. Because of the specific wording, one should consult with an attorney to write up this type of trust.



No Comments

Leave a comment
Comment Information

Attorneys Schedule a
to experience
Contact Us Now »

Irvine Office
2020 Main Street, Suite 600
Irvine, CA 92614

Toll Free: 866-454-2281
Fax: 949-975-7501
Irvine Law Office Map

Westlake Village Office
340 North Westlake Blvd, Suite 110
Westlake Village, CA 91362

Phone: 805-373-1500
Fax: 805-373-1503
Westlake Village Law Office Map

*AV Preeminent and BV Distinguished are certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the bar and the judiciary. Martindale-Hubbell ratings fall into two categories: legal ability and general ethical standards.