Spendthrift Trust Clause (Beneficiary's Bankruptcy or Insolvency At Any Time, Payments to Spouse and Issue) (ON)

Summary

This spendthrift trust clause directs the trustee to hold the share of the named beneficiary and keep it invested, and to pay the whole or part of the net income derived from it to the beneficiary or his/her/their spouse or issue. If the beneficiary is insolvent or bankrupt, the trustee is authorized to make payments to the beneficiary's spouse or issue. This clause includes practical guidance and drafting notes. A self-benefit trust is, as the name suggests, settled for the benefit of the settlor, who is also the beneficiary. It is similar to an alter ego trust except that the settlor of a self-benefit trust is not required to have attained the age of 65, and any property remaining in the self-benefit trust after the settlor dies is deemed disposed of at fair market value and forms part of the settlor's estate. If the beneficiary is an undischarged bankrupt or is about to declare bankruptcy, creditors have a right to claim his or her interest in an estate if the interest is vested. ...