Spendthrift trusts are designed to limit a beneficiary’s ability to quickly spend trust assets. Spendthrift trusts place obstacles between the beneficiary and the trust funds, ensuring the beneficiary has no claim to the assets until they are distributed, often through specified monthly payments or distributions at set intervals. Spendthrift is a term given to beneficiaries who may be careless with money, and spendthrift trusts offer grantors a way to provide for such beneficiaries while protecting the estate’s inheritance from such spending.

A spendthrift trust can be beneficial in several situations. It may protect trust funds from being spent on gambling, alcohol, or frivolous shopping by the beneficiary. This type of trust is also useful when the beneficiary is facing an impending divorce, substantial medical costs, or other financial hardships that could make the trust funds vulnerable to creditors. Additionally, a spendthrift trust may be advisable when leaving trust funds to teens and young adults, as it can provide protection until they can manage their finances responsibly.

A spendthrift trust is a compassionate way to provide necessary funds to your loved ones, while still protecting against a beneficiary’s money management habits. The grantor can direct a trustee like Altruist^™  to make payments on behalf of a beneficiary for expenses like rent, food, bills, and medical needs, while also ensuring that the trust’s funds provide the beneficiary with long-term financial security. Spendthrift trusts can even include incentive provisions, such as lump sum payments for achieving milestones like college graduation, or even health provisions such as quitting smoking. However, it is important to note that a spendthrift trust is irrevocable, so it is wise to consult an attorney and trust administrator like Altruist^™ for guidance on whether a spendthrift trust is right for your situation and how best to establish one.

Expert Guidance for the Financial Future of Your Beneficiaries

At Altruist^™, we provide loving care and guidance to our clients throughout the entire lifetime of their trust- ensuring all terms are fulfilled with accuracy and transparency. Our expert trust management teams will work with you and your attorney to create a customized spendthrift trust that outlines exactly how and when assets will be distributed to your beneficiaries.