An inheritance meant to support a loved one can quickly become vulnerable if that person struggles with debt, spending, or outside pressure. A Louisiana spendthrift trust can limit a beneficiary’s control over inherited assets and prevent many creditors from reaching the property while it remains in the trust.
At Buhrer Law Firm, we represent clients in Metairie, Jefferson Parish, and the New Orleans area who want to protect an inheritance without cutting off a beneficiary’s financial support. Our Metairie spendthrift trust attorney can help you set clear distribution terms, choose the right trustee, and create a trust that reflects your goals while complying with Louisiana law.
Why Choose Buhrer Law Firm for a New Orleans Spendthrift Trust?
Louisiana trust law is shaped by the state’s civil law tradition. A generic form may not account for these rules or give your family the protection you intended. Clients choose Buhrer Law Firm because:
- Attorney R. Scott Buhrer has practiced Louisiana estate and succession law since 1986.
- He holds a J.D. and an MBA from Tulane University, which supports his work with investments, business interests, and complex estates.
- Louisiana courts have appointed him as a Special Master to provide recommendations on complex legal matters.
- He has earned an AV Preeminent rating from Martindale-Hubbell.
- Scott works directly with clients and explains trust provisions in plain English.
- We draft each trust around the client’s property, family relationships, and long-term goals rather than relying on a generic template.
What Is a Spendthrift Trust Under Louisiana Law?
A spendthrift trust contains language restricting a beneficiary’s ability to sell, assign, pledge, or borrow against an interest in the trust. It may also prevent many creditors from seizing that interest before the trustee makes a distribution.
The person establishing the trust, known as the settlor, transfers property to a trustee. The trustee manages the property for the beneficiary and makes distributions according to the written terms.
This arrangement differs from an outright inheritance. When a beneficiary receives property directly, that person controls it and may spend or transfer it. A spendthrift trust keeps the trustee in charge and can release money gradually or pay for approved expenses.
Who May Benefit From a Spendthrift Trust?
A spendthrift trust is not limited to beneficiaries with a history of poor financial decisions. Families may consider one when a beneficiary:
- Is a minor or young adult
- Has significant personal or business debt
- Struggles with compulsive spending, gambling, or substance use
- Is vulnerable to manipulation or financial exploitation
- Works in a profession with a higher risk of lawsuits
- Has an unstable marriage or is going through a divorce
- Needs continuing help managing money or property
The terms can be tailored to the beneficiary’s needs and the risks you want to address.
How Can a New Orleans Spendthrift Trust Control Distributions?
You decide the distribution framework when the trust is created. Some trusts provide regular payments or release portions of the principal at selected ages. Others give the trustee discretion to approve distributions based on the beneficiary’s circumstances.
For example, you may allow trust funds to be used for:
- Education or job training
- Medical treatment
- Housing and basic living expenses
- Starting or purchasing a business
- Other needs identified in the trust
The trustee may also pay providers directly, meeting the beneficiary’s needs without releasing unrestricted cash.
Who Should Serve as Trustee?
You may name a relative, friend, professional fiduciary, or corporate trustee. The right choice depends on the trust’s value, the type of property it holds, and the decisions the trustee must make.
A relative may understand the beneficiary but have difficulty denying requests or enforcing restrictions. An independent trustee may be more neutral. We will help you compare potential trustees and define the trustee’s authority.
Can Creditors Reach Assets in a Louisiana Spendthrift Trust?
A properly drafted spendthrift provision can stop many creditors from reaching a beneficiary’s interest while the property remains in the trust. The protection is not absolute.
Louisiana law permits courts to allow seizure for certain claims, including some support obligations and claims involving necessary services or supplies. Protection may also be unavailable for assets a beneficiary contributed to a trust for that beneficiary’s own benefit. Once the trustee distributes money or property, it may become available to the beneficiary’s creditors.
We will explain how these limitations affect your plan.
Can a Spendthrift Trust Hold a Forced Heir’s Share?
Louisiana reserves part of an estate for certain forced heirs, generally children who are under age 24 or who meet specific incapacity requirements. A spendthrift trust cannot eliminate a forced heir’s right to that portion. However, the forced portion may be placed in trust when the arrangement satisfies Louisiana law.
We will determine whether forced heirship affects your family and whether holding the required share in trust is appropriate.
Protect an Inheritance With a Plan Built for Your Family
A spendthrift trust can support a loved one while reducing the risks associated with an outright inheritance. Its effectiveness depends on clear terms, a capable trustee, and compliance with Louisiana law.
Buhrer Law Firm has helped families in Metairie and the New Orleans area plan their estates since 1986. Contact us to discuss whether a spendthrift trust belongs in your estate plan.
Frequently Asked Questions About Spendthrift Trusts
Can a spendthrift trust hold real estate?
Yes. A trust may hold real estate, investments, business interests, cash, and other property. Each asset must be transferred or directed to the trust properly.
Does a spendthrift trust automatically reduce taxes?
No. Tax treatment depends on the trust’s structure, ownership, assets, and distributions. Tax considerations should be reviewed separately during planning.
What happens if I create the trust but do not fund it?
An unfunded trust may provide little practical benefit. Establishing the document and transferring property into it are separate steps, both of which should be addressed in your plan.