Spendthrift Trusts

Definition: A Spendthrift Trust is a trust set up for beneficiaries who just can’t handle money. That is the function of the Spendthrift Trust. The Settlors fund this trust with the trustee appointed as the person to manage the funds for the family member who can’t manage money. The trustee disperses money out to the beneficiary on an ongoing basis. The trustee can still purchase assets that benefit the spendthrift. Also, this type of trust can be a sub trust of any type of Revocable Living Trust.

Purpose: The entire intent of this type of trust is to protect the nest egg from financial mismanagement and provide ongoing support for the beneficiary.

Benefit: The benefit of this type of trust is peace of mind that the beneficiaries will be provided from and protected from their own potential actions.