What is a Spendthrift Trust?.. Why is it for me?.. Where can I get info ?

[hayseed]

BENEFITS OF SPENDTHRIFT TRUSTS
What is a Spendthrift Trust?
There is a doctrine termed “spendthrift” used in the administration of a trust. If someone other
than the beneficiary transfers property to a properly designed trust for the benefit of that
beneficiary, creditors and the spouse of the beneficiary are not able to reach the assets of the
trust for any reason. Years ago, this was a frequently used technique for leaving property to
children who lack the financial ability to manage money. Now, in this litigious society, it is the
only way to leave property to your children or other loved ones, no matter how qualified they are
to manage their finances.Why are estate planners and their clients increasingly using Spendthrift Trusts?
It is easier to explain why, if we first understand that there are essentially two methods to leave
property to the typical beneficiary, excluding those that are irresponsible, etc., they are:
¨ Outright to the beneficiary
¨ Or In a trust for the beneficiary
As we are assuming that there are only two methods to leave the property, we need to compare
them with one another.
What can an owner of property do with the property?
There are actually a fairly limited number of things, they can do, and they are:
¨ Give the property away
¨ Leave the property to anyone they want after death
¨ Use the property without paying for the use
¨ Sell the property
¨ Lose the property to a creditor
¨ Lose the property to a divorcing spouse

Let’s compare that to putting the property in a Spendthrift Trust -
BENEFITS OF SPENDTHRIFT TRUSTS
Let’s see what the comparison shows:
¨ Give the property away: The Beneficiary of a Spendthrift Trust may be given the
power to transfer the property in the trust to anyone during their lifetime. In essence,
the Spendthrift Trust is identical to the outright bequest free of trust. We’ll give this
an Equal Power rating.
¨ Leave the Property to anyone they want after death: The beneficiary may be
given the power to leave the property to anyone at death. In essence, the
Spendthrift Trust is identical to the outright bequest free of trust. We’ll give this an
Equal Power rating.
¨ Use the property without paying for the use: The beneficiary-trustee of the
Spendthrift Trust may be authorized to use the property of the trust without paying for
the use. This would include the use of a home, personal property or any other asset.
In essence, the Spendthrift Trust is identical to the outright bequest free of trust.
We’ll give this an Equal Power rating.
¨ Sell the property: The trustee may be given the power to sell the
property and reinvest the proceeds. In essence, the Spendthrift Trust is identical to
the outright bequest free of trust. We’ll give this an Equal Power rating.
¨ Lose the property to a creditor: The Spendthrift Trust may be prepared in such a
manner that creditors of the beneficiary-trustee may NOT attach assets held in the
Spendthrift Trust. The Spendthrift Trust provides better/superior creditor protection. We’ll
give this a Superior Protection rating.
¨ Lose the property to a divorcing spouse: The Spendthrift Trust can be prepared
such that a divorcing spouse has little or no rights to the Spendthrift Trust’s property.
The Spendthrift Trust provides better asset protection. We’ll give this a Superior
Protection rating.
Now, let’s see how the Spendthrift Trust did in the item by item comparison:
¨ Give the property away: EQUAL RATING
¨ Leave the property to anyone they want: EQUAL RATING
¨ Use the property without paying for the use: EQUAL RATING
¨ Sell the property: EQUAL RATING
¨ Lose the property to a creditor: SUPERIOR PROTECTION
¨ Lose the property to a divorcing spouse: SUPERIOR PROTECTION

Since the Spendthrift Trust is so far superior to outright bequests, why don’t all clients
use them?

The primary reason is many estate-planning practitioners are simply not familiar with the
technique. In addition, some clients simply do not want what they perceive to be, “complicated
estate plans.” Trust us...paperwork is mininum (3 pgs) and simple if the bottom line.

Are Spendthrift Trusts complicated?

No, they are not. An easy comparison is the Family or Credit Shelter Trust that holds the estate
tax free amount for the first spouse to die. An annual tax return is due and accounting and
monitoring must be done.
However, it seems to us that the benefits provided by the Spendthrift
Trust far outweigh the additional costs after the surviving spouse has died.
NO PROBATE, NO INHERITANCE TAX Laws...and all the tax benefits make the Irrevocable,
discretionary, non grantor, complex, spendthrift trust SUPERIOR to many trust that simply do NOT
allow for tax benefits so many of us will need if you want to capitalize your trust with your entire
Investment. 100% of your investment will come into the your trust tax deferred. You are required to file a 1041 annually on the trust....we have expert accountants that will assist in your BEST interest.

It is for EARS that HEAR and EYES that SEE.
Looking forward to doing business with those that NEED what we have to offer which is, PEACE OF MIND in knowing your estate plan and paperwork is in order.

"Success in life happens by Choice, not by chance."

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[usc73man]

Thanks for Posting this Hayseed...! Something to consider.
RON