A trust is a separate legal entity that holds different types of assets for the intended benefit and use of its heirs, called beneficiaries. The grantor or settlor is the person who creates the trust and puts assets into it.
The grantor (settlor) makes all the rules about the trust, which are contained in the trust document. If you open a spendthrift trust, instead of bequeathing a lump sum to your beneficiary, you will have the trust pay out the money incrementally. These terms are laid out specifically in a provision that limits how much and how often the beneficiary receives payments from the trust and in what circumstances. For example, does the trust make monthly payments to the beneficiary? Quarterly? Only on birthdays?
To make sure the spendthrift clause is drafted in proper legal terms, you can seek the legal advice of a professional like an estate planning lawyer.
The grantor (settlor) also appoints a trustee to manage the trust. The trustee of a spendthrift trust is especially important because they are like a gatekeeper or middleman between the beneficiary and the trust property. If you open a trust during your lifetime (a living trust or inter vivos trust), then you can act as trustee. Just be sure to name a successor trustee to take over when you pass away who can continue managing the trust if you haven’t had the assets distributed already.
The benefit of establishing the spendthrift trust while you’re alive is that the assets are not subject to probate. If you have a spendthrift trust created upon your death through instructions in the will, then your beneficiaries must wait until the probate process is completed before they can receive any of the assets.