What are Spendthrift Trusts in Utah and Wyoming?

by Norris Law Group on June 9, 2014

What are Spendthrift Trusts in Utah and Wyoming?Imagine that you have a friend who would like to leave her estate to her son, whom she loves dearly. But your friend also knows that despite the fact that she has done everything to raise her son well and would do anything for him, her son has a substance abuse problem. Your friend is afraid that her son will squander his inheritance on addictive binges, and this thought is breaking her heart.

In some states (including Utah and Wyoming), your friend would have an option known as a “spendthrift trust.” A spendthrift trust is a trust specifically set up in the event of the death or incapacity of someone who fears that his or her heir(s) or inheritor(s) might waste an inheritance on unhealthy activities, or might fall prey to massive debt or to unscrupulous individuals. A parent of a child with substance abuse problems might want to set up a spendthrift trust, as might parent who has a child who has a learning difference which may not allow her to handle money well or to know whom she can truly trust. A parent who knows he or she has a terminal illness and won’t see a child grow to adulthood might want to set up a spendthrift trust to ensure that the child has money available for college that can’t be spent on anything else.

A spendthrift trust must be administered by a trustee, who must look out for the best interest of the beneficiary for life. The trustee could be a family member, family friend, financial professional, attorney or other professional familiar with spendthrift trusts. A spendthrift trust is also known as a “self-settled” trust. This means that the person who created the trust is also the only beneficiary of the trust, although a trustee must also be appointed.

Spendthrift trusts can be extremely personal, as are the circumstances as to why one might be needed, and should be set up based on the individual needs of each family. A meeting with a skilled attorney familiar with spendthrift trusts in Utah and Wyoming may help allay any concerns you may have regarding setting up a spendthrift trust for a loved one.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County and throughout Utah in the area of asset protection. Contact them today at 801-932-1238 or online for a free consultation.

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