Menu ${}${SEMFirmNameAlt}${}${SEMFirmNameAlt}
Practice Areas
Let's Get Started!

Should you fund a spendthrift trust for one of your heirs?

When parents and grandparents devise estate plans in order to leave their beneficiaries legacies, sometimes their estate planning attorneys may recommend establishing something called a spendthrift trust for one or more heirs. But what are these trusts, and for whom are they ideal?

Spendthrift trusts are handy deterrents that can save an heir from financial disaster. While not every heir will benefit from such a trust, the ones who need them in most cases need them desperately.

The trusts serve the dual purpose of protecting the bulk of the trust from an irresponsible heir as well as from creditors that might pursue the heir for unpaid accounts.

Spendthrift trusts differ from conventional trust funds as the assets are controlled by trustees who oversee and manage the investments by and distributions from the trusts. Beneficiaries don't have access to the principal and must have all payments and reimbursements approved first. Heirs also are prevented from accessing the trust's assets and pledging them as collateral for dubious purchases, such as sports cars.

Quite understandably, many heirs chafe under such restrictions and may resent their benefactors for controlling them from beyond the grave by tightening the purse strings preemptively. However, the money and assets belong to those who establish these spendthrift trusts, who are, of course, free to set them up as they see fit.

It may help ease your mind to realize that creating a spendthrift trust is the only way that you can assure that your heirs will have a financial cushion to fall back on in years to come should they experience hard times. Your estate planning attorney can review your options and help you decide on the best course of action to take.

Source: The Balance, "How a Spendthrift Trust Can Protect Your Heirs from Themselves," Joshua Kennon, accessed Oct. 06, 2017

No Comments

Leave a comment
Comment Information

Serving businesses and individuals throughout Massachusetts

Waltham Office
375 Totten Pond Road
Suite 200
Waltham, MA 02451

Waltham Law Office Map

Braintree Office
25 Braintree Hill Office Park
Suite 406
Braintree, MA 02184

Phone: 617-523-1555
Braintree Law Office Map

Cranston Office
200 Midway Road
Suite 159
Cranston, RI 02920

Cranston Law Office Map

Hyannis Office
1330 Phinney’s Lane
Hyannis, MA 02601

Hyannis Law Office Map

Norwood Office
520 Providence Highway
Suite 10
Norwood, MA 02062

Norwood Law Office Map

Westborough Office
276 Turnpike Road
Suite 228
Westborough, MA 01581

Westborough Law Office Map

Woburn Office
444 Washington Street
Suite 203
Woburn, MA 01801

Woburn Law Office Map