Spendthrift Trusts: Protecting Your Estate After You're Gone - KLTV.com - Tyler, Longview, Jacksonville |ETX News

11/21/04

Spendthrift Trusts: Protecting Your Estate After You're Gone

You work hard your entire life and create a will to make sure your estate is left to your loved ones. But, now you can go even further and control not only who gets your assets, but how and when they're used. How? It's something called a spendthrift trust.

49 year old Howard Levine knows he won't be around forever. "You never know what life is going to bring," says Levine. So he's taking steps to protect his family now, especially his children. "The concern is that they will come into money and not have the life experience or the where-with-all to appropriately manage money," says Levine. Basically, Howard wants to make sure his kids don't blow their inheritance. So he's set up a spendthrift trust, which allows him to control how much money his kids use at any given time. "The object of the exercise here is to make sure that they don't come into a bunch of money and then go out and buy a Lamborghini and then all of the fruits of your labors are gone," says Levine.

Tyler financial planner, Jose Feliciano has drawn up some spendthrift trusts. He likes the flexibility they offer his clients who choose them. "You might have Child "A" who needs to be treated different from Child "B" who needs to be treated different from Child "C," says Feliciano. " And if you have the spendthrift clause in your trust, then it also protects the assets from bankruptcy and creditors of the beneficiary."

You can even prevent someone from claiming rights to the estate in the event of a nasty divorce. "There's no reason not to have this benefit. A spendthrift provision is a real benefit for the beneficiary," says Mike Janko of the National Association of Financial and Estate Planning.

"It's completely mainstream," says Jonathan Green. He's an attorney who specializes in the trusts. He set up Howard's. He says these trusts are not only for the rich and famous. "We use spendthrift trusts in essentially every estate planning instrument we do," says Green. Especially if there are children under thirty, like in Howard's case.

What about Howard's wife? She gets his business, but if she remarries... "That business will pass to my children as opposed to going to her new husband because I want that business to stay in my bloodline," Howard says.

In the end, for Howard, protecting his assets is important. Protecting his family long after he's gone: Priceless. "At least I've done my best," he says. "I can sleep at night. I'm confident that I've got things covered as best as I can."

Jose Feliciano says a financial planner can get you started down the road toward establishing your spendthrift trust. But an attorney, experienced in estate planning will need to be involved to complete the process.

Powered by Frankly