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Beach Bum Trust Provision

Definition - What does Beach Bum Trust Provision mean?

A beach bum trust provision is a stipulation that limits the amount that a beneficiary can receive from the trust. Specifically, it mandates that the beneficiary receives trust distributions equal to their earnings. This type of provision ensures that the beneficiary will continue to work instead of relying on proceeds from the trust.

Justipedia explains Beach Bum Trust Provision

As its name indicates, a beach bum trust provision is specifically designed to ensure that the recipient won't depend on proceeds from the trust as a sole source of income or use them to adopt an irresponsible lifestyle. Therefore, it is both incentivizing and punitive.

On the one hand, it promotes responsibility and financial independence by matching the amount that the beneficiary earns. On the other hand, if they can't hold a job or refuse to work, the beneficiary won't receive anything from the trust.

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