Some people in South Carolina might be considering using a trust as part of their estate plan. A spendthrift trust can help ensure that assets are protected against a beneficiary's irresponsible spending. It can also protect assets against creditors.
A trustee is placed in charge of a spendthrift trust. The trustee may be an individual or may be a corporate entity. The trust outlines how distributions are supposed to be made, and the trustee is responsible for making those distributions. A beneficiary would be unable to use the assets in the trust as collateral on a loan. If the beneficiary defaulted on a loan, creditors would be unable to access the principal of the trust.
A spendthrift trust is created in the same way as other trusts, but it must include a spendthrift provision. An attorney may be able to assist a person in creating this type of trust as well as using other types of estate planning tools to protect assets and minimize taxes.
Trusts may have a number of other uses as well. Many people prefer them because they are more private than a will. Because they do not go through the probate process, their contents are not public record. A trust might also ensure that beneficiaries get assets more quickly than they would with a will. A person who has a relative with special needs who receives government assistance might want to create a special needs trust. This allows distributions to be made that can assist a person with necessities like rent or provide amenities without endangering that assistance. For others, a trust may outline when and how a beneficiary receives distributions. For example, a person might not receive a distribution until reaching a certain age. Distributions might also be left to the discretion of the trustee.