A trust makes sense in a variety of situations, but finding the right one for the right occasion is tricky. Only estate planning can determine how to best use and write up a trust in Georgia. If you’re concerned about the future of a beneficiary, you may want to consider how a spendthrift trust can help him or her. With this option, you can protect your estate and an inheritance from wasteful spending. Unlike common trusts, a spendthrift one remains active after you die.
The spending habits of your beneficiaries is a key factor in determining your need for a spendthrift trust. Some of your heirs may have proven to possess poor spending habits, or others may even have a clinical issue that makes them legally irresponsible. Trusts are protective in nature, but using a spendthrift clause in yours is the direct result of a predisposition.
Financial literacy relates to how well your beneficiaries understand money. Some may be too young. Even so, those under 18 must become adults to obtain a trust inheritance. Whether age or education is the factor, lacking financial skills while possessing large sums of money is a concern. When planning their estates, people can accommodate their beneficiaries’ lack of financial literacy by:
• Appointing a trustee to manage the trust’s assets
• Giving written orders to the trustee for guidance
• Preparing a replacement trustee for future conflicts
• Choosing a trustee who knows how to relate with beneficiaries
Estate planning in Georgia
Your debt liability also determines your need for a spendthrift trust. Anytime you set up this type of trust, it gives you the best chance of managing someone’s assets when you’re gone. At times, the skills that your beneficiaries lack call for someone else to manage their life or money.