What is a spendthrift trust?
A spendthrift trust is a type of trust which is set up in order to protect a beneficiary from squandering their inheritance. The trustee of the trust, who is usually a neutral third party such as a bank, is in charge of managing the funds and assets of the trust. The trustee is responsible for ensuring that the funds in the trust are used for the benefit of the beneficiary. Under a spendthrift trust, the beneficiary cannot freely access the funds, but instead the trustee must approve the expenses and withdrawals. This makes it harder for the beneficiary to squander their inheritance, as the trustee has to make sure that the funds are being used responsibly. A spendthrift trust is a useful tool for ensuring that beneficiaries are not at risk of misusing their inheritance. It is particularly helpful in protecting minors, as they may not have the experience or knowledge necessary to manage their inheritance responsibly. In Washington, a spendthrift trust is regulated by the Revised Code of Washington Title 11. The code provides specific details on how a trust must be set up in order to qualify as a spendthrift trust. It is important to make sure that the trust meets all of the requirements outlined in the code, or it may not be legally considered a spendthrift trust.
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