One of the most significant benefits is the ability to provide spendthrift protections. If you are going to be leaving an inheritance to someone that is not ready to handle a significant sum of money, you may want to leave a direct, lump sum bequest.
Under these circumstances, you could include a spendthrift provision when you establish a living trust. After your passing, the trust would become irrevocable, and the beneficiary would not be able to access the assets in the trust. They would have to go through the trustee.
In a legal sense, the beneficiary’s creditors would “step into their shoes.” Since the beneficiary does not have access to the assets, this would also apply to their creditors, so there would be an asset protection element.
With regard to the nature of the distributions, you can leave instructions for the trustee. You could allow for monthly distributions, and you can set a dollar amount. Some people will instruct the trustee to distribute the trust’s earnings broken up into monthly increments.
The trust can potentially stay active for up to 21 years, so it can provide ongoing income for an extended period of time.