A spendthrift trust is a type of trust that regulates a beneficiary’s access to the funds or assets held within the trust account. It’s an important estate planning tool that can help guarantee your beneficiaries are taken care of, while simultaneously ensuring your assets are distributed ...
All trust funds are either revocable or irrevocable. Both are referred to as"living" trustswhen the grantor creates them during their lifetime. A "testamentary" trust is one that's created after the grantor's death, usually under terms left in a last will. It's irrevocable because the gra...
What is the purpose of a trust fund? Atrust fund allows the person who created the trust (thegrantor) to manage money and assets for the benefit of another person, thetrust beneficiary. Many people create trust funds to disburse assets or give money to their family members and heirs over ...
Thetrustee, who is a neutral third party (an individual, a trust bank, or another professional fiduciary) charged with managing the assets involved The grantor generally creates an arrangement that, for a variety of reasons, is carried out after they are no longer mentally competent or alive. ...
If the grantor is still alive when the trust terms end, the money and property pass to the beneficiaries without incurring estate taxes. If the grantor dies before the trust terms end, the trust assets are typically included in estate taxes. Spendthrift trusts Spendthrift trusts limit a ...
Spendthrift trust: The trustee decides how the beneficiary is allowed to use the money. Charitable trust: An irrevocable trust that donates assets in the trust account to one or more charities. Special needs trust: Supports beneficiaries with functional needs without disqualifying them from government...
Spendthrift trust.A spendthrift trust sets limits on how, when, and how much money from the trust a beneficiary can access. This allows the grantor to set limits that protect the beneficiary from overspending their inheritance. This type of trust also protects the trust assets from creditors. ...
Trust types There are a wide range of trusts, all designed for specific purposes such as removing the value of your home from your estate, passing life insurance proceeds outside of probate or protecting an inheritance for a spendthrift child. All trusts, however, fall into two broad categories...
A spendthrift clause is a provision included in a will, trust or other legal document that restricts an individual's ability to transfer or assign property that is owned by the estate. Generally, a spendthrift clause is designed to protect beneficiaries from themselves by preventing them from enga...
But, before I discuss the annuity approach, let me suggest that you also consult an attorney about setting up a "spendthrift trust" as an alternative. A trust typically costs several thousand dollars, requires a trustee, and there are annual maintenance costs. Since many advisers recommend using...