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A spendthrift trust can protect your family if properly written

We all have them in our families: give them $100 and they spend $110 within an hour after you give it to them, usually on some extravagance that they don’t really need. One word for this type of person is spendthrift. And, whether a spouse or a child or other relative, since it is difficult to control their spending during your lifetime, how could you possibly control it after you are gone?

The answer in Nevada is a "spendthrift trust." A spendthrift trust can be a useful part of an estate plan, but must comply with the law to operate correctly or be valid legally. To enforce compliance, the assistance of an estate planning attorney will be helpful in the creation and operation of the trust.


This type of estate planning tool has two important characteristics:

  • An independent trustee controls the money in the trust and the spendthrift must request distributions from the trustee; and
  • Creditors of the spendthrift cannot use the assets of the trust to satisfy the debts of the spendthrift.

In some situations, a trust may include a spendthrift provision even if there isn’t a specific target of the trust. This, in the same way, protects the assets of the trust from creditors for unpaid debt or if the beneficiary is sued.

The Spendthrift Trust Act of Nevada explains how to set up a spendthrift trust and how to make sure that it operates according to the law so it doesn’t lose the protections it was set up to achieve. The Act also sets out the limitations of the trust: it is for the “support, education, maintenance and benefit of the beneficiary alone” and it doesn’t depend on factors such as the actual needs of the beneficiary or the needs of any dependents of the beneficiary. It may also be enforced regardless of capacity or competency (such as mental illness) of the beneficiary.

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