Three Things to Know About Oklahoma Spendthrift Trusts

A spendthrift trust refers to a type of trust that lets beneficiaries inherit money without the ability to decide how the money is spent. These trusts are particularly helpful when an heir lacks the responsibility necessary to manage assets. Instead, these trusts grant the authority to determine how assets are spent to an independent trustee, who makes all decisions about how funds should be used for a recipient’s benefit. Because spendthrift trusts play an important but complex role, this article reviews three things to understand about the way in which these trusts operate.   How Spendthrift Trusts Work   These trusts prohibit beneficiaries from borrowing or spending against trust funds. The trusts are also created to prevent creditors from seizing any assets in the trust to pay debts owed by the beneficiary. To be effective, a spendthrift trust must contain precise language. Oklahoma as well as many other states recognize spendthrift trusts.    The Reasons Why People Create Spendthrift Trusts   There are several reasons why people create spendthrift trusts, but some of the most common advantages include:   Creating a trust is a powerful way to make sure that your beneficiaries receive adequate care and protection even if you [...]