What is a spendthrift trust?
A Spendthrift Trust is an estate-planning tool used in Alaska and other states to protect assets from creditors and preserve the assets for the intended beneficiary. In simple terms, a Spendthrift Trust is a trust set up by the owner of the assets, such as a parent or grandparent, to provide for the management and distribution of their estate upon their death. The creator of the trust, also known as the grantor, decides how and when the trust assets will be distributed to the beneficiaries. The grantor can choose to limit the beneficiary’s access to the assets until a certain age or period of time. The trust also makes it possible to protect the trust assets from the beneficiary’s creditors, by preventing them from attaching a lien to the trust. A Spendthrift Trust can also be used to ensure that the intended recipient gets the full inheritance and avoids wasteful spending and irresponsible actions. The trust can be customized to include instructions to the trustee to make distributions in the event the beneficiary needs financial assistance or to appoint a custodian for the assets. In Alaska, the state laws regulating Spendthrift Trusts are similar to those found in other states. Trustees must still manage the trust assets as directed by the grantor and are held to a fiduciary standard when it comes to investing the trust assets. However, trustees may also receive compensation for their services and are allowed to pay themselves if they are the same person as the grantor. Trusts must also provide for separate accounts for each beneficiary, which will make it possible for each beneficiary to receive an appropriate portion of the trust assets.
Related FAQs
What are the rights of a surviving spouse?What is a private annuity trust?
What is the definition of inheritance law?
What is a trust document?
What are the different types of powers of attorney?
What is the difference between a trust and a corporation?
What are the trust funding requirements?
What is anancillaryadministration?
What is involved in a step-up in basis?
What are the advantages and disadvantages of a living trust?
Related Blog Posts
Understanding the Basics of Inheritance Laws: A Guide to Successfully Navigating State and Federal Statutes - July 31, 2023How to Ensure Your Estate Plan Reflects Your Wishes Through Inheritance Laws - August 7, 2023
Protect Your Rights as a Beneficiary: Understanding Your Legal Rights After Beneficiary Inheritance - August 14, 2023
Comprehending the Duties and Responsibilities of Executors of Estates: How to Properly Administer an Estate and Fulfill Inheritance Law Requirements - August 21, 2023
Maximizing the Benefits of Inheritance Law for Family Heirs of Estates - August 28, 2023