What is a spendthrift trust?

A spendthrift trust is a kind of trust created under California probate law. It is designed to protect the assets of the trust from the beneficiary’s creditors and from the beneficiary’s own imprudent behavior. A spendthrift trust can be used to manage a beneficiary’s assets and income to make sure they are not wasted. In a spendthrift trust, a trustee is appointed to manage the trust assets. The trustee is responsible for making sure the income from the trust is used only for the beneficiary’s benefit. The trustee also ensures that the beneficiary does not transfer or waste the trust assets by spending them on frivolous things. The beneficiary of the trust is prevented from selling or transferring his trust interest, nor can the beneficiary pledge it as collateral. If the beneficiary attempts to do either, the transfer or pledge will not be recognized by third parties. The spendthrift trust is a very effective tool to protect assets from creditors and from imprudent behavior. It can also help beneficiaries manage their finances in a responsible manner. A spendthrift trust can be created while the grantor is alive or upon death. In either case, it is important to have an experienced attorney help plan and create the trust to ensure it meets all the requirements of California probate law.

Related FAQs

What is a living will?
How is an estate distributed if there is a will?
What is a trust protector?
Can probate be avoided?
What is an affidavit?
What is the difference between an executor and a trustee?
What is an executor's commission?
Are there any costs involved in probate?
What is a probate referee?
What is the difference between a will and a trust?

What is a spendthrift trust?

Related FAQs

Related Blog Posts