What is a spendthrift clause in a trust?
Many types of trusts include a spendthrift clause. It’s a provision that can prevent trust funds from being paid to anyone other than the trust’s beneficiary. Including a spendthrift clause in a trust can, for example, prevent a greedy brother-in-law from getting his hands on assets that you left for your sister. In many cases, it can also keep the trust’s assets away from creditors. How can I use trusts to make sure my beneficiaries use their inheritance wisely? To insure that an inheritance is used wisely, set up a trust in your will (called a testamentary trust). Trusts are popular among people with beneficiaries who arent able to manage property well. This includes elderly beneficiaries with special needs or a relative who may be untrustworthy with money. It may be a good idea to require such beneficiaries to obtain money from a trustee who would exercise discretion about how to distribute it, instead of giving the money outright in your will. A discretionary trust gives the truste
