What Is A Spendthrift Trust?
Do you want to leave money or property to support a loved one? A trust may be one of the most effective, efficient options. If you have concerns about how your loved one will manage the funds—which is especially common for people who want to leave support for a teenager, college student, or young adult—a spendthrift trust may be the sensible option. At Fisher Law LLC, we have extensive experience helping people and families navigate trust planning issues. Within this post, our Norwood estate planning attorney provides an overview of spendthrift trusts in Massachusetts.
An Overview Spendthrift Trusts in Massachusetts
The Legal Information Institute defines a spendthrift trust as a form of trust that is “designed to restrict the beneficiary’s ability to access or control the trust’s principal or income.” In other words, this type of trust restricts the beneficiary’s ability to access or control the trust funds directly—ensuring that the assets are managed/distributed/used properly.
A key benefit of trusts is that they can provide liability protection. The assets within a properly funded trust may be protected against creditor claims. Notably, under Commonwealth law (Massachusetts Uniform Trust Code, G.L. c. 203E, § 505(a)(2)), a trust can obtain asset protection regardless of whether or not it has spendthrift provisions.
The Grantor Can Custom the Terms of a Spendthrift Trust in Massachusetts
One of the core advantages of spendthrift trusts is that they can be customized. Indeed, as the grantor, you can create a spendthrift trust that is narrowly crafted for your situation. Some of the potential conditions that can be applied to a spendthrift trust in Massachusetts include:
- Distribution Limits: The trust can specify that distributions to the beneficiary are to be made only at certain times, such as annually or when the beneficiary reaches a certain age.
- Purpose-Specific Distributions: The trust may stipulate that funds be used solely for specific purposes, like educational expenses, healthcare costs, or housing expenses.
- Incentive Provisions: Conditions can be included that require the beneficiary to meet certain criteria or achieve specific goals, such as obtaining a degree or keeping a job.
An Estate Planning Lawyer Can Help You Set Up the Best Trust for Your Goals
Trust planning is complicated. If you are considering setting up a spendthrift trust, it is imperative that you are represented by an experienced estate planning attorney. Your Massachusetts trust planning lawyer can answer your questions, advise you on your options, and help you develop the trust that best suits your goals and the needs of your family.
Speak to an Estate Planning Lawyer in Norwood, Massachusetts for More Information
At Fisher Law LLC, our Massachusetts estate planning attorneys are standing by, ready to help. If you have any specific questions about spendthrift trusts, please do not hesitate to contact our firm today for a completely private case review. With an office in Norwood, we provide trust planning services in Norfolk County and throughout the surrounding Greater Boston area.
