What is a spendthrift clause?
Sometimes the person establishing the trust has concerns about a beneficiary’s ability to manage trust assets well, or wishes to prevent trust assets from being attached by creditors if a beneficiary is sued. A spendthrift clause specifies that a beneficiary’s interest shall not be transferable or assignable by the beneficiary, or be subject to the claims of the beneficiary’s creditors. Creditors demands for supply of necessities are sometimes allowed. A spendthrift clause cannot be used to avoid claims for alimony or child support.
