Smalley Law Firm Menu Contact
Discuss Your Case With
An Experienced Lawyer Today
A Standard OfExcellence

Why creating a spendthrift trust can be a good plan

When drawing up a comprehensive estate plan, it may be necessary to include a spendthrift trust. This type of trust is useful when a potential heir has proven to be fiscally irresponsible or may have creditors that could make claims to the funds.

Trusts are an effective means to preserve familial wealth for generations, as well as creating future funding through wise investments. But when one or more beneficiaries have failed to demonstrate the ability to control overspending tendencies, it may be necessary to structure a trust with oversight by a trustee.

Trustees can distribute funds on prearranged schedules over time or when certain events occur, e.g., graduation from college, marriage, the birth of a child, etc. The trust may be set up to where the annual disbursements are the only accessible funds. Beneficiaries or their creditors would not be able to access the trust assets themselves, and thus diminish the worth of the trust.

The only meaningful difference between a spendthrift trust and a regular trust is the spendthrift provision that is included when the trust is created. Including such a provision may rankle the beneficiaries of the trust, however. They may perceive it to be over-arching and controlling from beyond the grave.

The important thing to keep in mind is that you are the one who intimately knows the beneficiaries' weaknesses and strengths. This is especially true when the creator of the trust is the parent or grandparent of the beneficiaries. He or she will need to carefully weigh the importance of the beneficiaries' financial autonomy over the need to preserve core assets for generations to come.

Source: The Balance, "How a Spendthrift Trust Can Protect Your Heirs from Themselves," Joshua Kennon, accessed Dec. 15, 2017

No Comments

Leave a comment
Comment Information

Meet The Attorneys

Email us for a response

Tell us about your case

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Smalley Law Firm
305 East Comanche Street
Norman, OK 73069

Phone: 405-322-5653
Fax: 405-801-2220
Map & Directions