Estate Planning · Haute Lawyer Network
What Is a Spendthrift Trust?
Last reviewed: June 2026
A spendthrift trust is a trust that restricts the beneficiary's ability to transfer their interest in the trust and protects the trust assets from the beneficiary's creditors.
The trustee controls all distributions — the beneficiary cannot demand their share early, pledge their interest as collateral, or assign it to creditors. Creditors cannot reach trust assets before they are distributed.
Spendthrift provisions are used when a beneficiary struggles with addiction, compulsive spending, financial immaturity, or is in a profession with high liability exposure.
The protection only applies to undistributed assets — once the trustee makes a distribution to the beneficiary, those funds are in the beneficiary's hands and subject to their creditors.
Frequently Asked Questions
Can any trust include a spendthrift provision?
Yes. A spendthrift clause can be added to virtually any irrevocable trust. Most well-drafted trusts include spendthrift provisions as a matter of course, regardless of whether the beneficiary currently has financial problems.
Does a spendthrift trust protect assets from child support and alimony obligations?
In most states, spendthrift provisions do not protect trust assets from claims for child support or alimony — courts can order distributions for these obligations even with a spendthrift clause.
Can the beneficiary be their own trustee in a spendthrift trust?
If the beneficiary controls distributions, the spendthrift protection may be reduced or eliminated. For full protection, an independent trustee should control distribution decisions.
Does a spendthrift trust protect against all creditors?
Not all. Government creditors, tort victims in some states, and ex-spouses seeking support may be able to reach trust assets despite a spendthrift clause.
How is a spendthrift trust different from a discretionary trust?
A discretionary trust gives the trustee full discretion over whether and how much to distribute — the beneficiary has no right to demand distributions. A spendthrift trust may require distributions but restricts the beneficiary's ability to transfer them in advance.
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