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What is the spendthrift clause in a trust?
Spendthrift Clause. The interests of the Beneficiaries are held subject to a spendthrift trust.
Are there any irrevocable spendthrift trusts in the United States?
Spendthrift Trusts in the United States. An Irrevocable Spendthrift Trust, if properly formed in the State of Nevada, is currently not subject to income taxes of other States, as long as the Nevada Spendthrift Trust is qualified to do business in the other State (s).
What happens if a trust beneficiary refuses a distribution?
If a trust calls for a distribution to the beneficiary, but the beneficiary refuses such distribution and elects to retain property in the trust, the spendthrift protection of the trust ceases with respect to that distribution and the beneficiary’s creditors can now reach trust assets.
Can a trustee decide how much money to give a beneficiary?
For example, the trustee may be required to make set payments to the beneficiary every month, or the trustee may be given the power to decide how much money, if any, the trustee should receive. When making a spendthrift trust, a grantor must consider how much control to give to the trustee.
Can a trustee withhold money from a beneficiary of a trust?
The trust document can also specify that the trustee may only make payments on behalf of the beneficiary. The trustee can then withhold direct cash payments from the beneficiary. Each spendthrift clause is drafted according to the specific situation that needs to be addressed.
Are government claims against trusts enforceable?
Government claims may also be enforceable against trust assets. For example, a Delaware woman went to court seeking the spousal support due her under a separation agreement with her husband, who was the beneficiary of a spendthrift trust.