What is a spendthrift trust?
There are many different types of trusts but a spendthrift trust is designed to protect someone who has trouble with money. This could be from a traditional creditor standpoint, it could also be from a divorce concern about spouse getting assets standpoint. But basically with a spendthrift trust, you have someone other than the beneficiary who is the trustee and the trustee actually cannot give money directly to the beneficiary. The trustee pays bills directly to the apartment complex, or mortgage, or whatever, and has discretion. Because the trustee cannot give money to the beneficiary and has discretion over what kind of bills to pay, creditors actually cannot demand money from this. So, this is a great type of trust if you’re concerned about a child who has some kind of problem with money and you want to make sure that the money you were leaving them is used wisely. If you’ve got more questions about a spendthrift trust, please let me know. Thanks.
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