When planning to leave assets to your beneficiaries, you want to be confident they will use them wisely. Sometimes, however, you may have a genuine reason to worry if a beneficiary is someone who is capable of properly managing the funds and assets you plan for them to inherit.
A possible solution in this scenario is to create a spendthrift trust. At the Law Offices of Andrew Cohen, an Encino spendthrift trust attorney can explain why this may be an ideal option, and help you create this type of trust if you decide doing so is the right choice for your goals.
Why Establish a Spendthrift Trust in Encino
Not all individuals manage their finances or assets as responsibly as others. Perhaps there is a beneficiary in your life to whom you wish to leave certain assets. However, for various reasons, you may not be confident you can trust this individual to properly manage them.
There are many reasons why you may feel this way. Depending on both your age and the age of the beneficiary, you may suspect that when they inherit the assets you wish to leave to them, they will still be too young to know how they should exercise their newfound control over said assets.
Other circumstances may give you a reason to wonder if a beneficiary is trustworthy enough to be responsible with any assets left to them. Maybe they have a gambling problem. Perhaps they have struggled with addiction. Or, it’s possible their past behavior in regard to managing their finances indicates they are not someone who tends to be prudent when managing assets. These are all valid reasons you might decide a spendthrift trust offers an ideal solution when you want to leave your assets to someone, but you have doubts they will manage them in a manner you would approve of.
A spendthrift trust allows you to appoint a trustee who has the authority to make decisions regarding how the funds and assets in the trust are to be used. You can specify how you wish for them to manage these assets, allowing you to ensure they are used in the best interests of the beneficiary, without allowing the beneficiary to exercise any actual control over them.
Additionally, the beneficiary of a spendthrift trust will not be able to use the trust as collateral. This ensures the assets within the trust are thoroughly protected.
Consider a basic example. You plan on leaving a certain amount of money to a grandchild but expect to pass before they will be old enough to spend or invest it wisely. You can create a spendthrift trust, appointing a trustee to distribute payments to your grandchild, or on their behalf, at intervals or milestones of your choosing. This gives you the peace of mind that comes from knowing the money will only come under the actual control of your grandchild when they are older and more responsible.
Contact an Encino Spendthrift Trust Attorney Today
Whether you’re not sure if creating a spendthrift trust is the ideal solution for your needs, or you’ve already decided to create a spendthrift trust but need help setting one up, get in touch with an Encino spendthrift trust attorney at the Law Offices of Andrew Cohen today. We will help you navigate the process. Get started by contacting us online to set up your free consultation or by calling us at 661-481-0100.
