What is a Nevada Spendthrift Trust?

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What Is a Nevada Spendthrift Trust?

A Nevada spendthrift trust is a trust meant for someone who does not have full control of their trust funds. This means that it isn't suitable for every single situation. As a result, interested individuals should speak with a lawyer to make sure that it is the right choice for what they have in mind.

What Should You Expect from a Nevada Spendthrift Trust?

Here are some of the things that interested individuals can expect from a spendthrift trust:

Meant for Those Who Can't Be Trusted with Full Control of the Funds

There are a wide range of reasons why someone might set up a spendthrift trust for a beneficiary. For example, said individual might be bad with money. Alternatively, said individual might be easy to cheat. For that matter, the beneficiary might have some kind of addiction, meaning that giving them full control of the funds means a very high chance of seeing the money squandered within a short period of time.

Meant to Protect the Money from the Beneficiary's Creditors

People with one or more of these issues have a high chance of becoming indebted. As such, a spendthrift trust is meant to protect the money from being claimed by the beneficiary's creditors. After all, the beneficiary can't access the money on their own, which in turn, means that the beneficiary's creditors can't access the money either. Of course, if the beneficiary receives money from the trust, said individual can use that money for whatever purpose they might have in mind.

Controlled By the Trustee

A spendthrift trust is controlled by the trustee rather than the beneficiary. The trustee doesn't need to be a different person from the guarantor. In fact, it is very common for the trustee and the guarantor to be one and the same. Besides this, the guarantor should make sure to name a successor trustee, who will be responsible for taking over if the trustee dies. Perhaps unsurprisingly, the beneficiary can never be either a trustee or a successor trustee because that would defeat the entire point of a spendthrift trust.

The Grantor Decides the Trustee's Degree of Control

Different spendthrift trusts can see trustees being granted very different degrees of control. For example, the trustee might have the power to give money to the beneficiary or even the power to buy goods and services before giving those to the beneficiary. Similarly, the trustee may or may not be granted the power to withhold payments under certain circumstances. The grantor is the one who sets these conditions, which must be chosen with care to maximize the chances of their intentions being carried out.

Consider the Effect on the Trustee

On a related note, the grantor should also consider the effect that being a trustee will have on said trustee. There are certain conditions that can give the trustee a great deal of responsibility, which will require a great deal of time and effort from said individual.

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People shouldn't set up a spendthrift trust unless they are sure that it is the best way for them to make sure that their intentions are carried out. Furthermore, even if they have decided that it is the right tool for the right job, there is still the matter of choosing the right conditions. As such, it is a good idea for them to get in touch with Battlefront Legal, which can provide them with the relevant knowledge that they lack.