Estate planning can serve many purposes. In most cases, though, those who engage in estate planning simply want to provide for their loved ones as much as possible. Fortunately, there are many estate planning tools that can help further that goal. But estate planners need to be careful in which approach they take so that their estate doesn’t end up being squandered.
This especially arises in the context of spendthrift trusts. This type of trust allows a named beneficiary to receive distributions from a trust but only in amounts and frequencies specified by the trust document. This can allow trust funds to stretch further, and those assets remaining under the trust are protected from creditors until those funds are dispersed.
There are risks with this type of trust, though. Primarily, a trust creator needs to ensure that the named beneficiary is protected from himself or herself. This can be done by carefully tailoring the trust terms in accordance with the facts at hand.
For example, an individual who is afraid that a beneficiary will quickly spend large sums of money can specify that the beneficiary is to receive smaller payments with a greater period of time between dispersals. In the most extreme cases, an estate planner may want to reconsider whether a spendthrift trust is really the most effective route to take.
Estate planning may seem easy, but it can actually be quite complicated. This is why those who are looking to get the most out of their estate plan should consider working closely with an experienced estate planning attorney. By doing so, individuals can better ensure that both their estate and their loved ones are taken care of as fully as possible under the circumstances.