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When you draft your Texas estate plan, you may have concerns about leaving money or assets to a particular child or beneficiary because you question how that individual might spend it. Maybe your child is too young to be able to make sound decisions about what to do with what you leave behind. Conversely, maybe you have a child with a drug, alcohol or gambling problem and you fear he or she might blow through your money too fast.

If any of these circumstances describe your situation, you may want to consider establishing something called a spendthrift trust. What is a spendthrift trust, and how does it help protect your legacy?

How the spendthrift trust works

When you establish a spendthrift trust, there are three parties involved. These parties include you, the trustor or grantor, your child, the beneficiary, and the trustee, who oversees the trust’s distributions once you die. The trustee has to make the distributions before the beneficiary may access them. The trustee also has the right to withhold assets if certain circumstances never come to fruition.

How the spendthrift trust benefits you

With a spendthrift trust, you may set parameters regarding when and how your beneficiary may access the funds inside. You may want your child to receive a certain amount each year to limit overspending, or you may want him or her to maintain a year of sobriety before receiving any distributions. A spendthrift trust gives you control in these and other areas, helping you avoid having one child blow through funds too fast.

Most Texas spendthrift trusts allow the trustee to make distributions when they are necessary for the “health, support, education or maintenance” of the beneficiary.