Mississippi Irrevocable Trust Agreement for Benefit of Trustor's Children and Grandchildren with Spendthrift Trust Provisions

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Multi-State
Control #:
US-02272BG
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Word; 
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Description

A Trust is an entity which owns assets for the benefit of a third person (beneficiary). Trusts can be revocable or irrevocable. An irrevocable trust is an arrangement in which the trustor departs with ownership and control of property. Usually this involves a gift of the property to the trust. The trust then stands as a separate taxable entity and pays tax on its accumulated income. Trusts typically receive a deduction for income that is distributed on a current basis. Because the trustor must permanently depart with the ownership and control of the property being transferred to an irrevocable trust, such a device has limited appeal to most taxpayers.


A spendthrift trust is a trust that restrains the voluntary and involuntary transfer of the beneficiary's interest in the trust. They are often established when the beneficiary is too young or doesn't have the mental capacity to manage their own money. Spendthrift trusts typically contain a provision prohibiting creditors from attaching the trust fund to satisfy the beneficiary's debts. The aim of such a trust is to prevent it from being used as security to obtain credit.

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  • Preview Irrevocable Trust Agreement for Benefit of Trustor's Children and Grandchildren with Spendthrift Trust Provisions
  • Preview Irrevocable Trust Agreement for Benefit of Trustor's Children and Grandchildren with Spendthrift Trust Provisions
  • Preview Irrevocable Trust Agreement for Benefit of Trustor's Children and Grandchildren with Spendthrift Trust Provisions
  • Preview Irrevocable Trust Agreement for Benefit of Trustor's Children and Grandchildren with Spendthrift Trust Provisions

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FAQ

A spendthrift clause is a provision in a trust most trusts contain one that prevents a trust beneficiary from using a future distribution to secure credit. The clause also prohibits payment to a creditor if it extends credit to a beneficiary based on future distributions.

A "spendthrift trust" is designed to protect a beneficiary who would, without oversight, quickly spend or lose any inheritance.

Thus, there are two benefits of creating a spendthrift trust:It protects the grantor and beneficiary from wasting or selling the assets; and.It protects the assets from any creditors of the beneficiary.

Black's Law Dictionary defines a spendthrift as: One who spends money profusely and improvidently; a prodigal; one who lavishes or wastes his estate. A spendthrift trust is: A trust created to provide a fund for the maintenance of a beneficiary and at the same time to secure the fund against his improvidence or

An irrevocable trust is a trust that can't be amended or modified. However, like any other trust an irrevocable trust can have multiple beneficiaries. The Internal Revenue Service allows irrevocable trusts to be created as grantor, simple or complex trusts.

: a person who spends money foolishly, profusely, or wastefully.

The grantor should also name a successor trustee who would take over when the grantor dies. The beneficiary cannot be a trustee.

Lifetime Spendthrift Trust This type of trust provides for the beneficiary for a lifetime. The terms can vary. Typically, there might be a monthly distribution to the beneficiary of, for example, $3,500 for the lifetime of the beneficiary.

Benefits of a Spendthrift TrustProtects your estate from negligent spending habits. Distributes assets incrementally, instead of at once. Protects assets from your beneficiary's creditors. Bypasses probate (if established during your lifetime)

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Mississippi Irrevocable Trust Agreement for Benefit of Trustor's Children and Grandchildren with Spendthrift Trust Provisions