Asset Protection and Estate Planning in Alabama: The Irrevocable Spendthrift Trust
By all rational calculations, we live in one of the most litigious societies in history. The fear of frivolous lawsuit keeps many people up at night. If you’ve spent a lifetime building an estate, to provide for yourself and loved ones, the last thing you want is an opportunistic fender-bender-pariah to sue you for a broken taillight.
Thankfully, there are a variety of legal strategies we can employ to protect or shield your assets from these types of bogus claims. One strategy that often gets thrown into the discussion is the irrevocable spendthrift trust. What makes things more complicated is the varying state-law differences on the topic. Alabama may not have the most advantageous scheme in the country, but there are plenty of tools in the tool belt. It’s all laid out in Alabama Code 19-3B-501 through 505. But, interpreting those statutes is a trick in and of itself.
Here’s what you should know, in a nut shell: if the trust is not irrevocable, it’s not going to help much at all, even with a spendthrift provision. Often times the irrevocable spendthrift trust is used to pass on wealth to the next generation, while limiting the next generation’s ability to dispose of the property willy-nilly, and limiting the ability of the next generation’s creditors to diminish the value of the wealth.
So, the irrevocable spendthrift trust can be a useful tool in the tool-belt to protect your hard earned assets.
About the Author, Samuel J. McLure, Esq.
Sam graduated from Huntington College in 2006 with a degree in Business Administration. Before transferring to Huntington College, he attended Bethune-Cookman University as the first minority-white running back in the historically black conference.
He went on to Jones School of Law and graduated with honors, cum laude. During law school, Sam had the distinguished honor of serving with the Faulkner Law Review, clerking with Supreme Court Justice Patricia Smith, clerking with the Attorney General’s Office, and studying International Law with Cornell University in Paris, France.
However, Sam’s most memorable law school achievement was adopting his first child from the Hungarian foster-care system. It was through that process that he and his wife saw the great need to protect children in the foster care system and to encourage adoption.
Sam’s law practice has maintained an orbit around protecting vulnerable and at-risk children. He and his wife have four children and have been actively engaged in the foster care system. Sam is the author of The End of Orphan Care, and book devoted to unpacking the orthodoxy and orthopraxy of orphan care; and has founded or served with ministries and community outreach initiatives such as Kiwanis, Personhood Alabama, Proposal 16, and Sav-a-Life.