Ohio residents who want to properly manage their money and other assets may find a trust is the way to go. Not only is it a method to protect the owner and their assets after death or in the case of mental incapacity, but the owner can also direct how the assets are distributed in a responsible manner.
One of the biggest advantages to having a trust is it outlines how the estate’s assets should be distributed after death. According to the American Bar Association, a living trust allows the owner to make changes to, or even revoke, the trust throughout their lifetime. This is beneficial in that if there are concerns about how an heir will manage their inheritance, the owner can modify the trust to limit how the property is distributed.
According to the Huffington Post, this modification is known as a spendthrift provision. This provision protects the trust’s assets from financially irresponsible heirs as well as some other circumstances. In wealthy families, a spendthrift trust prevents the beneficiaries from quickly wasting a large amount of money. In this case, the trustee is instructed to distribute the inheritance over a reasonable period of time so the heir can maintain their lifestyle but not squander all the money. Some trustees may have permission to distribute the remaining assets once the heir reaches a certain age.
While every situation is different, a spendthrift provision may also protect assets from division in the event of a divorce or bankruptcy. There are exceptions to this, however, so a trust does not guaranty these protections.