TRUSTS FOR CREATIVE SPENDERS

Trusts can be quite useful for protecting adult children. However, for some children, the trust serves an additional function: It protects the principal from being rapidly spent by a child. These trusts have a specific name—they are called "spendthrift" trusts.  A spendthrift trust allows a parent to protect a certain amount of inheritance. It may be appropriate to transfer inheritance outright to some of your children and the same amount of property into a spendthrift trust for the "creative spender" child.

A spendthrift trust will need to be managed by a trustee who can make good decisions. For a larger trust, this could be a bank or trust company. In many circumstances a private trustee is selected, such as one of the family financial advisors or even one of the other children.

A fairly typical plan could look like this. If one spouse passes away, the estate will be transferred to the survivor. When the survivor passes away, their favorite charity will receive a bequest of 10% of the estate. The other 90% will be divided. Some children will receive their shares outright. However, the share for the creative spender will be transferred into a spendthrift trust with a trustee. There will also be a successor trustee.

The trustee of the spendthrift trust will invest the amount in a diversified portfolio of stocks and bonds. The trustee will have discretion to distribute income and/or principal to the creative spender. When the creative spender reaches age 55, they will then receive the full inheritance with the expectation that by that time that child will be responsible and able to manage the gift. 

 

JOIN THE HERITAGE CLUB

A planned gift - a Gift That Comes Later - is an option for any donor who holds an organization close to their heart. Planned giving donors need not be affluent. They do need to make a plan. Please consider joining the Heritage Club by including a percentage gift to United Way of Santa Barbara County when creating or updating your will, trust, or donor advised fund, or when designating beneficiaries for your IRA or life insurance policy. Planned gifts help build resilient communities. They improve school readiness and academic achievement, financial empowerment, and crisis response and recovery in Santa Barbara County. They can also lower taxes for yourself and/or your heirs and/or can provide income for yourself and/or your heirs.

Interested? Start learning about planned gifts here:

• I intend to include or have already included United Way of Santa Barbara County in my plans • I want to learn more about the Heritage Club. • I want to learn about how planned gifts not only leave a legacy, but can also lower taxes for the donor and/or their heirs and/or can provide income for the donor and/or their heirs. • I have questions.

SIMPLE IRA, DAF AND INSURANCE POLICY PLANNED GIFTS 

Planned gifts not only leave a legacy. 
They can lower taxes for your clients and/or their heirs.

  GETTING YOUR DUCKS IN A ROW PROVIDES PEACE

FREE United Way 100 Year Anniversary
Estate Planning Workbook

We can help you get your estate planning ducks in a row. Your estate is all the money and property you own. An estate plan is a set of legal documents outlining how your assets will be distributed after you pass. Estate planning is not just for the wealthy. With even a simple plan, you can protect your family and leave a legacy. However, many people never make this plan. Only 36% of Americans have an estate plan, and of those, 20% have not updated their plan in the last five years.

When you start to create or update your estate plans, you will find ways to:

1. Leave more for your family and the causes close to your heart 2. Create income for you and your family 3. Ensure you leave the legacy you want

Our FREE Estate Planning Workbook is a fill-in-the-blank booklet that can help you organize your information. An estate planning attorney will need this same information when creating a will and trust. The workbook includes descriptions of some of the ways you can include the causes you care about, like United Way, in your estate plans. We are offering this guide as our gift to you because we believe it will help you create a successful and satisfying future. CLICK HERE to request a free copy.