This is one type of "property control trust", which means that there are conditions or regulations placed on the trust. A spendthrift trust safeguards the property from a beneficiary who could dissipate the inheritance, and to further keep the property out of the hands of the beneficiary's creditors. This could be a way to ensure that a beneficiary will receive their inheritance, and not squander it either.
In a spendthrift trust, the beneficiary basically is unable to touch the property held in trust, and neither can he or she pledge this property to someone else. This further means that creditors will not be able to get to this property (the trust principal). The trustee, who is in charge of the trust, is the one who can dispense trust principal to the beneficiary. Exactly how the property and funds will be given to the beneficiary by the trustee will depend on the terms of the trust. And once the beneficiary has any trust principal, creditors can access it too.
This type of trust is helpful for someone who wants to leave assets to a beneficiary but fears that it might get used up all at once, either because he or she has a history of financial mismanagement, is gullible or even has given into a scam before, has debt issues, or even has an addiction problem. A spendthrift trust could be a solution.
So not only do you have to choose the right trustee to look over the trust and its property, but you would need to delineate clear guidelines on how the trust is supposed to be run. And the good news is that you have a lot of latitude in catering the trust's operation to what you need. You could tell the trustee to make a certain amount in payments every month to the beneficiary, for instance. Or maybe you want leave the managing of the trust up to the discretion of the trustee, enabling them to make the call on how much the beneficiary would get, and when. You can get really detailed.
You can decide whether you want to create any stipulations on cash payments, or whether the trustee should go ahead and actually use the beneficiary's funds to buy them property and services. Will there be regular payments, and will they be a fixed amount, a percentage, etc.? Is the trustee able to refuse the beneficiary payment? You could even set guidelines as to when a trustee can refuse payment, such as if the beneficiary starts to gamble, accrues debt, or even finds themselves in a manipulative relationship. This can be a huge responsibility, so consider what the trustee would have to go through. You can be the trustee yourself and name a successor trustee to pass this on to at the time you name. (The beneficiary of a spendthrift trust can never be the trustee.)
You would also have to think about how long you want the trust to last, and what you would want to happen with the trust if the beneficiary passes away or comes across a significant life change. You might even consider allowing the trustee to dole out greater amounts of money to the beneficiary if they go to college or come down with a medical condition, for example.
As estate planning is already complex enough, having to create such a specialized trust will certainly require the help of an experienced probate lawyer. There are many bases to cover, and many difficult decisions to make. Do not make these decisions without the help of a legal expert. Call a probate attorney today!