Estate Planning With a Spendthrift Trust

 Posted on September 22,2022 in Estate Planning

When it comes to estate planning, there are a variety of tools that can be used to achieve your goals. One such tool is the spendthrift trust. A spendthrift trust allows you to set aside money or assets for a beneficiary who may not be able to manage their finances responsibly. This type of trust can provide much-needed financial protection for the beneficiary, while also allowing you to maintain some control over how the money is spent, even after your passing.

Besides, a spendthrift trust can be a valuable tool in estate planning as it ensures that your assets are not tied up in an Illinois probate court.

What Are the Requirements for Setting Up a Spendthrift Trust in Illinois?

In order to establish a spendthrift trust in Illinois, there are certain requirements that must be met. First, the trust must be created in writing, and the terms of the trust must be clear and specific. The trust must include specific language indicating that it is a spendthrift trust.

Second, the settlor (the person who establishes the trust) must appoint a trustee, and the beneficiary (the person who will benefit from the trust) must be identified. The trust must also state how the funds will be distributed and when distributions can be made. Finally, the trust document must be signed by the beneficiary in the presence of witnesses.

Things to note are that the trustee must be someone who can be trusted to manage the trust assets responsibly and in the best interests of the beneficiary/beneficiaries. The trust may also state that it is for the exclusive benefit of the beneficiaries and cannot be used to repay any debts or expenses incurred by the benefactor (the settlor).

How Do Spendthrift Trusts Protect Assets From Creditors?

Spendthrift trusts are a great way to protect your assets from creditors. They work by creating a legal entity that is separate from you and your assets. This means that if someone tries to sue you and get your money, they can only go after your assets, not the trust's assets.

Spendthrift trusts are especially helpful in Illinois, where the Illinois Collection Agency Act says creditors can get permission to go after your assets if you have debts. But with a spendthrift trust in place, they can't touch your money or property. As such, setting up a spendthrift trust is a great way to make sure your assets are safe from creditors.

If you're worried about creditors trying to take your money, talk to an attorney about setting up a trust for you.

Would You Like To Create a Spendthrift Trust in Illinois?

In conclusion, using a spendthrift trust in estate planning can be a very effective way to protect your assets from being squandered by a beneficiary. It can also protect your property from creditors and is helpful in avoiding probate.

If you are considering establishing a spendthrift trust, it is important to work with an experienced Glenview estate planning attorney to ensure that the trust is drafted properly. You may request more information or get started by contacting our Illinois real estate attorney at the Livingston Law Office today.