North Carolina residents who are looking to do what's best for their children may be interested in creating a spendthrift trust. This may be especially useful for those who may not have had experience handling money who may otherwise be inheriting a lot of it at once. Such trusts can either be created while a person is still alive or triggered upon a person's death.
Typically, the trustee has broad authority to provide money to beneficiaries as he or she sees fit. In some cases, the trust lasts for a defined period of time, and it can also allow for discretionary distributions by a trustee. This may allow a child to have relatively easy access to their inheritance without having direct access to it. In addition to protecting children who may not be responsible with money, a spendthrift trust may be out of reach of creditors.
Therefore, creating the trust may keep assets in the family even in the event of a bankruptcy or divorce. Creating a trust that allows for mandatory distributions over time may allow for the most protection from creditors. Those who wish to create such a trust may want to consider whether the cost of doing so is worth it in their situation.
Creating a trust may allow for asset protection those alive today and for future generations. As the terms of a trust may be broad or narrow in scope, it may be relatively easy for a person to use one to meet his or her estate plan needs. For parents looking to protect their children from spending money too quickly, trusts may be the perfect tool to limit how their money is used while striving to ensure that they are financially provided for.