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Spendthrift Trusts

November 09, 2023

Spendthrift Trusts are a powerful asset protection tool for beneficiaries. Here, we'll explore the different aspects of Spendthrift Trusts and their benefits for beneficiaries. Additionally, we will review the legal and financial requirements and potential drawbacks that come with them.

A Spendthrift Trust is an irrevocable trust designed to protect the beneficiary's interests from creditors' claims and prevent the beneficiary from squandering the trust's assets. The trust is managed by a trustee and assets are distributed to the beneficiary based on the terms of the trust agreement, ensuring both asset protection and controlled distributions. The trustee has the discretion to make distributions to the beneficiary, but only after considering the beneficiary's needs and best interests.

In our experience one of the main benefits of a Spendthrift Trust is that it can provide asset protection for the beneficiary. The Trust's assets may be protected from the claims of creditors, including bankruptcy, divorce, or lawsuits. A Spendthrift Trust can provide the beneficiary with peace of mind to focus on their goals and aspirations without the risk of asset depletion by outside claims.

Another advantage is the control and flexibility in distributions made to the beneficiary. The trustee can consider the beneficiary's needs and make discretionary distributions, allowing the beneficiary to maintain a sense of control over their financial situation. Within the trustee's guidelines, the beneficiary's spending decisions will not compromise the trust's assets and the trustee, if appointed prudently, may protect the beneficiary from their own mistakes.

In summary, a Spendthrift Trust can offer essential asset protection and controlled distributions for beneficiaries. Securing your financial future and protecting your loved ones' interests starts with proper planning. To learn more about Spendthrift Trusts and how they can benefit you or your loved ones, please use the link below to schedule your meeting!

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Note: Investment strategies and specific investments mentioned may not be suitable for everyone. Individual decisions should be made after careful consideration of one's financial objectives, situation, and needs. This information is not intended as a personalized recommendation. Seeking advice from a personal investment advisor is recommended.

Please note that representatives do not offer tax or legal advice. Discussions related to taxes are purely informational, not exhaustive, and should not be interpreted as legal, tax, or accounting advice. It is advisable for clients to consult with qualified legal, tax, and accounting advisors as needed.

Securities and investment advisory services are provided through registered representatives of MML Investors Services, LLC, a member of SIPC.