[PODCAST] What is a Spendthrift Clause, and When Do People Use it? From Security Mutual

As people grow older and become (hopefully) wealthier, life doesn’t always get easier. There’s always something to worry about, and at some point, if you’re lucky, your worries evolve from accumulating your wealth to protecting it. 

We’ve all seen cases—MC Hammer, Lindsay Lohan, Lisa Marie Presley and even her one-time husband Michael Jackson—who seem to have more money that they could ever use, until they find a way to waste it. If you’re worried about future generations destroying the wealth you’ve worked to accumulate, perhaps you should consider a spendthrift clause. 

A spendthrift clause is usually just a provision within some sort of trust, say a family or life insurance trust. The basic idea is that you can put a trustee between yourself and any beneficiary who might be inclined to waste money on things you would consider useless or ill-advised.¹ 

SML Planning Minute episode 319, “What is a Spendthrift Clause, and When Do People Use It?”, examines: 

• How does a spendthrift clause work?
• When would such a clause be used?
• Importance of finding the right person to be trustee
• And why, you need an estate planning attorney to help you figure all this out, and to put together the legal documents for you.