What is a Spendthrift Trust and how does it work?

A Spendthrift Trust is an estate planning tool used to protect the trust beneficiary’s assets from creditors. It works by placing assets into the trust and appointing a trustee to manage the trust and its assets. The beneficiary is named in the trust document, and they are the rightful owner of the trust assets. However, the beneficiary does not have direct access to the trust assets. The trustee is the only one that can access and manage the trust funds, and they do so based on the instructions given in the trust agreement. In a Spendthrift Trust, the beneficiary is unable to transfer their interest in the trust assets to another person, and creditors are not able to use trust assets to pay off the beneficiary’s debts. This type of trust is especially useful if someone is receiving inheritance from an estate and they do not want their creditors to be able to access the assets. In Kansas, Spendthrift Trusts are governed by the Kansas Uniform Trust Code. This code sets out specific requirements for setting up a Spendthrift Trust, including the maximum amount of money that can be placed into the trust, who can be named as the beneficiary, and how the assets can be used. It also outlines the standard duties of the trustee. A Kansas attorney can provide more information about setting up a Spendthrift Trust in this state.

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What is a Spendthrift Trust and how does it work?

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