What is a Georgia Spendthrift Trust?

Georgia law allows individuals in Norcross and throughout Gwinnett County to create many different types of trusts as part of their estate plans. All trusts will either be created as revocable (meaning that the trust can be changed or canceled within the lifetime of the settlor, meaning the person who makes the trust) or irrevocable (meaning that the terms of the trust cannot be amended and the trust cannot be canceled once it is created). Within those categories, various kinds of trusts exist, and many have very specific purposes or are designed for particular types of beneficiaries.

One kind of trust that can be beneficial in a range of family circumstances is the spendthrift trust. What is a spendthrift trust, and how does it work? Our Norcross estate planning lawyers can explain in more detail, and we can speak with you today about setting up a spendthrift trust or another kind of trust in Georgia.

What is a Spendthrift Trust?

A spendthrift trust, or a spendthrift provision in a trust, is a type of trust designed to protect the assets held in the trust from any misuse or overuse by the beneficiary, and to protect those assets from any of the beneficiary’s creditors. This type of trust is designed so that you can provide financially for someone you care about while ensuring that the beneficiary will not spend all of the money in one place and will not have the money taken by creditors or debt collectors after a judgment, for example.

The name of the type of trust comes from the definition of a “spendthrift,” which is, according to Merriam-Webster, a person “who spends improvidently or wastefully,” or who is “given to spending money freely or foolishly.”

Why Create a Spendthrift Trust? 

Why should you consider creating a spendthrift trust? In short, if you want to leave assets to a loved one but you are concerned about how quickly or wastefully they might spend those assets, or you have concerns about a creditor or debt collector taking those assets, a spendthrift trust or provision may be the solution. There are many different reasons you might consider this type of trust, such as:

• You want to leave assets to a sibling, adult child, or another family member who is prone to gambling;
• You want to leave assets to your child, but they have just entered adulthood and have not yet learned to manage money; or
• You want to leave assets to a family member who is often struggling with debt and has been sued by creditors and debt collectors in the past.

Contact a Gwinnett County Estate Planning Lawyer for Assistance 

Spendthrift trusts can be extremely beneficial for many different reasons. Whether you have questions about a spendthrift trust or other types of trusts in Norcross, or if you are ready to begin working with a lawyer to create a trust and other aspects of your estate plan, you should reach out to an experienced Gwinnett County estate planning attorney at Bowman Law Firm as soon as possible. We assist clients with a wide range of estate planning matters, and we can begin working with you today on any trusts and other estate plan components. Contact our firm to learn more about the estate planning services we provide in Georgia.

Sources:

law.justia.com/codes/georgia/title-53/

law.justia.com/codes/georgia/title-53/chapter-12/article-5/section-53-12-80/