You are asked by a client of your law firm Alex Smith to pre

You are asked by a client of your law firm, Alex Smith, to prepare a trust in which he wants certain of his emancipated children to be trust beneficiaries. One child, Roger Smith, in Alex’s opinion, can not hold onto his assets without “squandering” them so that he never has any of his own money. Roger has spent all of his money on whatever then immediately suits him. Is there anything you would suggest or recommend that can be done to honor Alex’s concern with regard to Roger as you prepare this trust instrument? What and why?

Solution

To get the Answer of this question we need to understand first, What is the meaning of Trust - \"A trust is a setup where one can transfer right to take care of all or some of His or Her property for the beneft of third party.\"

The person who creats trust is termed as \"Settlor\" to whom rights are transferred is termed as \"Trustee\" and the third party who gets benefits from trust is termed as \" Trust Beneficiaries\"

Here In this Question Alex Smith is Settlor and His Sons are Trust Beneficiaries. Alex smith is concerend about Roger smith as Roger is very careless regarding Handling the Money.

Solution for Alex Smith concern can be that - He should keep Roger Smith as \" Remainder Beneficiary\" and Other son as \" Primary Beneficiary\".

Primary Beneficiary - Primary Beneficiary Have prefrencial right over the Income from trust. The benefit will be given 1st to primary beneficiary.

Remainder Beneficiary- Remainder Beneficiary\'s Interest is considered After considering the Primary Benefit.

By Doing as explained above Roger will not be having same privileges as Primary Beneficiary will have, so the chances to misuse the money by Roger will be very less. That will help in resolving the concern that alex have about Roger.