• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sinclair Prosser Gasior

Annapolis Estate Planning Attorneys

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Call Now: (410) 573-4818

Attend a Free Workshop Trustee School

  • Home
  • About Our Firm
    • About Our Firm
    • Founding Attorneys
    • Meet Our Team
  • Services
    • Annapolis, MD Asset Protection and Business Planning
    • Estate and Gift Tax Figures
    • Annapolis, MD Elder Law & Medicaid Services
    • Annapolis, MD Trust Administration & Probate
    • Family-Owned Businesses & Farms
    • Annapolis, MD Incapacity Planning
    • Annapolis, MD LGBTQ Estate Planning
    • Annapolis, MD Pet Planning
    • SECURE Act
    • Annapolis, MD Special Needs Planning
    • Estate Planning for Young Families
  • Resources
    • DocuBank
    • Elder Law Reports
    • Estate Planning Definitions
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Asset Protection Planning
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid
      • Power of Attorney
      • Probate Avoidance
      • Trust Administration & Probate
      • Wills
    • Is Your Estate Plan Outdated?
    • Probate Resources
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Trust Administration
      • Estate Planning for Niches
    • Top 10 Estate Planning Techniques
    • Newsletters
  • COMMUNITIES WE SERVE
    • Anne Arundel County
      • Annapolis
      • Crownsville
      • Davidsonville
      • Highland Beach
      • Millersville
    • Baltimore County
    • Calvert County
      • Dunkirk
      • Huntingtown
      • Owings
    • Charles County
      • Charlotte Hall
      • Waldorf
    • District of Columbia
    • Howard County
    • Maryland
      • Clarksville
      • Columbia
      • Ellicott City
    • Prince George County
      • Bowie
      • Fort Washington
      • Glenn Dale
    • Queen Anne’s County
      • Grasonville
      • Queenstown
      • Stevensville
    • St. Mary’s County
      • Charlotte Hall
      • Leonardtown
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
  • Make A Payment
  • Client Portal
Home / General / How Does a Spendthrift Trust Work?

How Does a Spendthrift Trust Work?

September 7, 2017 by Jon J. Gasior, Estate Planning Attorney

“How Does a Spendthrift Trust Work?” by Attorney Jon J. Gasior  (Audio)

If you are thinking about leaving money to someone who isn’t very good with managing financial matters, you may wish to consider using a spendthrift trust. A spendthrift trust is a powerful tool that makes it possible for you to protect a loved one from himself. spendthrift trust

If you have worked hard to build a legacy that you are going to leave to your family members, you don’t want someone’s irresponsibility to make your gift meaningless as the wealth is squandered soon after the gift is made. Instead, you can take steps to protect the wealth that you are leaving behind and make sure it is used in smart ways. You can keep continued control and help your financially irresponsible loved one stay secure if you make a plan in advanced that includes the creation of a spendthrift trust.

Sinclair Prosser Gasior can provide assistance with spendthrift trusts and with other kinds of trust. We will explain to you what this trust means, what is involved in creating one, and what the pros and cons are to trust creation. Once we have helped you to evaluate whether a spendthrift trust is right for you, our experienced attorneys can go through the process of actually helping you to make such a trust for your loved one. Give us a call to find out more about the assistance we offer.

How Does a Spendthrift Trust Work?

When you make any kind of trust, the process involves using a legal document to create the trust as something separate from you and your loved ones. The trust is its own “entity,” and the trust can own the property you put within it. You can transfer many types of personal property and even real property into your trust, but must make sure you understand what the rules are and whether a transfer could trigger adverse consequences like your bank demanding your full mortgage balance be repaid.

When you want to give money to an heir who you think is going to be financially irresponsible, you can create your spendthrift trust and transfer the desired money and property into it. The trust now owns the property. You can name the irresponsible heir as the trust beneficiary. The trust beneficiary is the person who benefits from the trust. The assets within it are used for his or her benefit.

You also must name a trustee. The trustee is the person with the fiduciary duty to manage trust assets in an appropriate way, to follow the instructions in the trust document, and to act in the best interest of the beneficiary. The trustee takes care of the wealth within the trust and, according to what you stipulated in the trust document, uses the wealth to advantage the beneficiary. The beneficiary could receive a set amount of money periodically distributed from the trust, or you can set up other rules, conditions, and protocols to facilitate the trust assets being used to benefit the trust beneficiary.

Since the trust beneficiary does not own the wealth that is in the trust, and cannot control it or access it, the money is safe. Creditors are not going to be able to get at it in order to satisfy a judgement that could be rendered against the heir who is bad with money. The financially irresponsible trust beneficiary is also not going to just be able to spend all the money very quickly with no strings attached.

Should You Make a Spendthrift Trust?

Whether or not you should make a spendthrift trust is going to depend upon many different factors, including whether you actually have someone in your life who you want to leave money to but who you don’t think can handle managing that money wisely.

There are costs associated with trust creation and with ongoing maintenance of the trust by the trustee. You must carefully consider whether the costs are worth avoiding the possible risk of the money you worked so hard to acquire being spent quickly or taken by creditors of an irresponsible heir.

Getting Help from A Maryland Trusts Lawyer

Before you make your estate plan, you should understand what spendthrift trusts are, how they work, and when you might need one. It is confusing to understand all of the trust laws and to know all of the rules of trust creation. The good news is, Sinclair Prosser Gasior can help you to undrstand options for trusts and can assist you in making the right choice on whether a trust is right for you and your family.

 

  • Author
  • Recent Posts
Jon J. Gasior, Estate Planning Attorney
Jon J. Gasior, Estate Planning Attorney
Attorney/Owner at Sinclair Prosser Gasior
His personal experience with family and the problems that resulted from their failure to create an estate plan resulted in his desire to learn more about this area of the law. From his work in the Elder Law Clinic, he further realized the need to plan not only for death, but also for incapacity during their lifetime.
Jon J. Gasior, Estate Planning Attorney
Latest posts by Jon J. Gasior, Estate Planning Attorney (see all)
  • Helping Your Family Through Estate Planning - September 21, 2022
  • Estate Planning Scams - August 16, 2022
  • What is the Maryland Trust Act? - July 11, 2022

Filed Under: General

Other Articles You May Find Useful

What Happens with my Car at my Death?
Estate Planning for Your Tangible Property
What Do Executors Need to Know?
What is a Letter of Instruction?
Patagonia Founder Gives Away His Company
Estate Planning for Blended Families

About Jon J. Gasior, Estate Planning Attorney

His personal experience with family and the problems that resulted from their failure to create an estate plan resulted in his desire to learn more about this area of the law. From his work in the Elder Law Clinic, he further realized the need to plan not only for death, but also for incapacity during their lifetime.

Primary Sidebar

Download our free estate planning worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Testimonials

5 Stars
Client Review
September 3, 2020
    

We initiated estate planning following a presentation by Sinclair Prosser Attorney Jon Gasior. We were so impressed, we contracted with them to complete our estate planning. Subsequently, we assembled information on our assets and Sinclair Prosser Gasior did the rest. Correspondence was communicated to our financial institutions and the estate was established. We were very pleased with the courteous manner of the Sinclair Prosser Gasior staff. However, it was their professionalism that made us satisfied we chose this firm to handle our estate. We have nothing but praise for Sinclair Prosser Gasior .

default image
– Walter K.

Blog Subscription

Sign up for our blog to receive all of our latest estate planning news and updates!
  • This field is for validation purposes and should be left unchanged.

ANNAPOLIS

900 Bestgate Road
Suite 103, Annapolis, Maryland 21401
Phone: (410) 573-4818
Fax: (410) 573-2802

BOWIE

4201 Mitchellville Road
Suite 403, Bowie, MD 20716
Phone: (301) 970-8080
Fax: (410) 573-2802

MILLERSVILLE

1520 Jabez Run Rd
Suite 300, Millersville, Maryland 21108
Phone: (410) 573-4818
Fax: (410) 573-2802

WALDORF

Hamilton Centre II
3261 Old Washington Road, Suite 2020 Waldorf, MD 20602
Phone: 800-366-4615

Map

map for office

Footer

footer logo
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

The information on this Maryland Attorneys & Lawyers / Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

© 2023 American Academy of Estate Planning Attorneys| Privacy Policy | Contact Us | Disclaimer | Site Map