What is a Spendthrift Trust?
I’m here with Attorney Brandon Roesler discussing some of the fundamentals of estate planning and ensuring that your assets and properties go to the people that you want to in the event that you pass away.
What is the difference between a will and a trust?
The biggest difference is when you setup a will, you will go through a process called probate which is after you die, you get an executor that looks at the will to make sure administered properly and then a judge will look through it. It can take a year, 2 years, potentially even longer and is very costly. For many people, a trust is a way to protect their assets and have a more effective and efficient way to get it to their loved ones. You don’t have to go through the courts or the legal process.
What are the types of trust that will help somebody ensure that their loved one will be provided for and not waste the asset?
If someone comes into our office, their particular circumstances will determine will, trusts, both, and what particular types of trust is good for them.
This is called a spendthrift trust and you can have certain provisions setup. For example, if I have 2 children, a son and a daughter. I want my daughter to have half of my estate. I also want half of my estate to go to my son but I don’t trust him. He may have a certain addiction problem, or bad spending habits, but what this enables is he gets a certain amount each month, and creditors are not able to attack the money that is going into the trust. This is to ensure long term well-being so he does not spend it all at one time, but rather, he gets an allowance each money.
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