Trusts are important estate planning tools that can allow individuals to place their assets in trust and for the benefit of others. The creator of a trust may place terms and conditions on how the trust beneficiaries may collect their trust income and different types of trusts may achieve different estate planning goals. This post will discuss one specific type of trust - spendthrift trusts - and will describe how some San Diego residents may use them to provide for individuals after the trust creators' deaths.
A spendthrift trust is a trust that prevents what a beneficiary may do with their trust interests. In other types of trusts a beneficiary may be able to sell or pledge their trust interests to others; spendthrift trusts prevent this from occurring and make invalid any attempts of beneficiaries to divest themselves of their trust interests before the time that they take possession of their trust assets.
Spendthrift trusts are designed to ensure that beneficiaries' creditors cannot take possession of the beneficiaries' trust interests. They protect beneficiaries who may not be capable of responsibly managing their financial assets and provide built-in protections to prevent others from seizing the asset interests that the trustees placed in the spendthrift trusts for them. Creating spendthrift trusts is something that Californians may wish to consider doing with the help of estate planning attorneys.
Like other forms of trusts spendthrift trusts must meet certain technical requirements in order to achieve their intended purposes. They can be important estate planning tools and their incorporation into estate plans should be discussed with lawyers who provide estate, probate and trust planning services.