You love your family. But maybe you’re worried about how they’ll handle an inheritance. Whether it’s due to creditor issues, risky spending habits, or just needing guidance, you’re not alone in wanting to protect your legacy. If you’re looking for a way to support your loved ones while keeping your assets shielded, a spendthrift trust in Florida may offer the peace of mind you need.
This guide explains a spendthrift trust, how it works, and why Florida residents often use this estate planning tool to preserve generational wealth.
What Is a Spendthrift Trust?
A spendthrift trust is an estate planning tool that allows you to leave assets to a beneficiary while shielding those assets from the beneficiary’s creditors, lawsuits, and even their own poor financial decisions.
When properly drafted, a trust spendthrift provision limits the beneficiary’s access to the trust assets. That means creditors generally cannot reach the trust assets until they’re distributed to the beneficiary. It also means the beneficiary can’t sell, transfer, or borrow against their interest in the trust.
Irrevocable trusts typically have spendthrift provisions as they offer greater asset protection. However, revocable trusts can also include spendthrift language for future protection after the trust becomes irrevocable upon the grantor’s death.
How Does a Spendthrift Trust Work?
Here’s how a spendthrift trust works:
- You (the grantor) create a trust document with the help of an estate planning attorney;
- You name a trustee, someone responsible for managing the trust, such as a trusted family member or a professional fiduciary;
- You include a spendthrift clause, which restricts the beneficiary, the person who receives the benefits, from accessing or pledging their interest; and
- The trustee distributes assets to the beneficiary over time or under any specific conditions you set.
Since the trust legally owns the assets, creditors cannot seize them while they remain in the trust. This structure is especially helpful for beneficiaries vulnerable to lawsuits, poor spending habits, or addiction.
What Is a Spendthrift Clause?
The spendthrift clause is the heart of the spendthrift trust. It’s the legal language that prevents both voluntary and involuntary transfers of the beneficiary’s interest. Without it, the trust may not offer the same protection.
According to Florida law, a properly drafted spendthrift clause makes a beneficiary’s interest non-transferable and inaccessible to most creditors until distributions are made.
Spendthrift Provision in Trust Example
Say you’re leaving an inheritance to your adult son, who’s struggled with debt in the past. You don’t want creditors to seize his inheritance or risk him cashing it out in a moment of crisis.
A spendthrift provision example is a trust set up by a parent for a financially irresponsible child, blocking creditors from accessing the trust before distribution. The trustee controls payouts, such as monthly allowances, preventing the child from assigning future funds or losing them to debts.
A spendthrift provision might work like this: “The interest of any beneficiary in the income or principal of this trust shall not be subject to voluntary or involuntary transfer, to the claims of creditors or others, or legal process.”
Pros and Cons of a Spendthrift Trust
Establishing a spendthrift trust can be a wise decision in certain situations. However, it is essential to understand both the advantages and disadvantages.
Spendthrift trusts can help:
- Protect assets from creditors. Assets are generally shielded from legal claims while held in the trust.
- Limit poor financial decision-making. The trust structure prevents the beneficiary from squandering their inheritance.
- Encourage long-term stability. Scheduled distributions can support a steady financial foundation over time.
However, some limitations of these trusts include:
- Less flexibility for the beneficiary. They won’t have free rein over their inheritance, which can create tension.
- Ongoing trustee management. The trust requires careful oversight and recordkeeping.
- Legal complexity. Drafting and administering the trust often requires professional legal guidance.
Understanding both sides can help determine whether this trust fits your goals.
Why a Spendthrift Trust May Be Right for You
A spendthrift trust in Florida is often a good fit for families with the following concerns:
- You want to leave money to a child or grandchild with a history of financial instability;
- You’re worried about a beneficiary going through divorce, bankruptcy, or litigation; and
- You want to preserve family wealth while reducing the risk of mismanagement.
These trusts provide a safety net for your assets and peace of mind.
Count on Bucelo Diaz Law for Customized Estate Planning
You don’t have to figure out how to shield your estate on your own, especially if you’re considering a spendthrift trust or other options. At Bucelo Diaz Law, we help Florida families build practical estate plans rooted in real-world needs. With over 15 years of experience, an LL.M. in Estate Planning, and bilingual service, our team makes the process feel personal, not transactional. Whether you’re concerned about protecting assets or supporting your loved ones, we’re here to guide you forward.
Let’s Talk About Securing Your Family’s Future
Contact us to discuss how you can protect what matters most and build a plan that reflects your wishes.
Resources:
- Florida Trust Code, Part V (2024), link.
- MetLife, What Is a Spendthrift Trust? (September 2024), link.
- Finance Strategists, What Is a Spendthrift Trust and How Does It Work? (February 2024), link.
- SmartAsset, How (and Why) to Use a Spendthrift Trust (February 2025), link.
- JD Supra, Spendthrift & Discretionary Trusts in Florida: Further Analysis of Berlinger v. Casselberry, link.
