Ensuring that your family members are able to benefit from the assets you leave behind is one of the primary goals of estate planning in Michigan. We at the Bingham Legal Group PC often recommend spendthrift trusts to people who have concerns about their beneficiaries’ ability to handle wealth responsibly.
When you place assets in a trust, the trustee has control over them based on the instructions you leave. This can take some measure of accessibility out of the hands of your beneficiaries, which could be particularly advantageous if you are concerned that a creditor or ex-spouse may try to get their hands on your assets. According to Forbes magazine, a spendthrift provision can protect the trust funds even further.
This type of provision is included in a discretionary trust, so named because it gives the discretion over the funds to the trustee. Although you designate how you want the funds to be controlled, you also allow the person you have chosen the authority to determine when to provide funds to the beneficiary and when to withhold them.
So, for example, if your son is married to someone who plans to divorce him and take half of the assets from the trust, the trustee may be able to prevent that from happening. If your daughter is declaring bankruptcy, creditors may not be able to take the assets from the trust as payment for the debts. More information about estate planning tools and asset protection options is available on our webpage.