Many Florida residents who have accumulated wealth hope to pass their fortunes down to their children and grandchildren. They are often concerned, though, that the money will be used wisely. One way for a person to ensure that their money they worked so hard for is spent appropriately is to set up a trust, allowing the grantor to set up specific instruction for how the assets will be disbursed to heirs.
Some trusts have spendthrift clauses to protect the trust's assets from creditors. Though some states have restrictions on spendthrift clauses, the basic purpose of the wording is to prevent bill collectors from getting access to the funds in the trust. A spendthrift clause can protect the trust even if the beneficiary declares bankruptcy.
Trusts can be set up so that the beneficiaries receive assets when they reach certain ages or milestones. They can also have provisions that allow funds to be provided to the heirs in an emergency or money withheld during periods in their life when having the money would cause more harm than good, such as during a divorce. Many trusts further protect assets by requiring beneficiaries to have a prenuptial agreement. People who want to add a lot of conditions to their trust should carefully choose their trustee to ensure their wishes are carried out.
During the estate planning process, people often want to prepare for every possible situation. The more events that can affect the handling of a trust, the more likely the beneficiaries may feel that they are being controlled. A lawyer with experience in probate and estate administration may be able to help a client set up a trust that protects the heirs as well as the assets.
Source: Investing Daily, "Using Protection Trusts to Help Heirs", Bob Carlson, April 04, 2014