Maybe you have put off estate planning longer than you should have because you are worried about one or more of your loved ones and beneficiaries. They haven’t done such a great job of managing their lives thus far.
You’re pragmatic enough to realize they likely won’t stop making the poor decisions that get them into the situations they have in the past. You don’t want to enable a dissolute lifestyle. But you do want to provide for them financially once you are gone.
A spendthrift trust could solve your problems
Spendthrift trusts differ from their less restrictive counterparts in that these trusts deny the beneficiary access to the trust’s principal. A trustee whom you select oversees the trust management and pre-scheduled disbursements to your beneficiary.
In the event a situation arises where your beneficiary might need more money from the trust, the trustee must approve any deviations from the disbursement amount and scheduling.
Once the money is disbursed in increments, your control ends. Your beneficiary is free to do as they will with it. But they can’t squander the trust’s principal on addictions or vices. Spendthrift trusts also bar access from greedy ex-spouses and protect the principal from legal judgments or settlements.
Suggestions for whom to appoint as trustee
Do your loved ones a favor and don’t appoint one beneficiary as trustee over the funds of another. That practice almost guarantees adverse interactions between them, often siblings or parents with whom they formerly enjoyed convivial relations. This is an unnecessary complication that can easily be avoided by appointing a professional trustee to fulfill this role.