Does the UTC weaken spendthrift trusts?
The UTC recognizes the spendthrift trust and provides fewer exception creditors than under common law or the Restatements. 10 Accordingly, most creditors of a beneficiary of a spendthrift trust may not reach the beneficiary’s interest, the trust assets, or a distribution to or for the benefit of the beneficiary (unless and until the beneficiary receives it, at which point the creditor is able to reach it in the beneficiary’s hands). Because most trust instruments include spendthrift provisions, and there are few exception creditors under the UTC, the common law distinctions among discretionary, support, and hybrid trusts are irrelevant with respect to creditors’ rights in almost all circumstances. The critics miss this fundamental point. Regarding exceptions to spendthrift protection, even the critics concede that the UTC supports asset protection when it eliminates from the list of exception creditors persons who provide necessities to beneficiaries of spendthrift trusts. The criticis
