One of the things about planning your estate that is profound on a personal level is the realization that a time will come when your loved ones will never again have a chance to come to you for assistance. So, your legacy is going to have to provide for them in times of need.

Part of effective inheritance planning is to identify the needs and the proclivities of those will be receiving bequests from you so that you can transfer assets to your loved ones in an optimal manner. People that you care about equally may have very divergent lifestyles and different levels of ability when it comes to handling large sums of money.

Fortunately many of your heirs are likely to be established in their own right, and their inheritances will undoubtedly be handled appropriately. However, it is not uncommon for people to have a relative or relatives who simply are not very good at handling money. When you find yourself in this position you are faced with a dilemma. On the one hand, the family member who is not good with money is likely to need assistance going forward after you pass away. Yet, because this person has demonstrated poor financial instincts you may feel uncomfortable placing a large sum of money in his or her hands.

One course of action that is available to you as a response to these concerns is the creation of a spendthrift trust. With these trusts the beneficiary does not have direct access or decision-making power. Distributions from the trust are made by the trustee who is guided by the provisions that you set forth when you created the trust agreement. In addition to providing for the supervision of distributions and management of the principal, these trusts also afford asset protection because creditors and claimants cannot pursue funds that are in the trust.

Spendthrift trusts can provide you with the peace of mind you may be seeking and they are something to consider if you have concerns about the money handling abilities of any of your heirs.