Spendthrift Trust at Legal Glossary

What is it? A trust created for a beneficiary the grantor considers irresponsible about money. The trustee keeps control of the trust income, doling out money to the beneficiary as needed, and sometimes paying third parties (creditors, for example) on the beneficiarys behalf, bypassing the beneficiary completely. Spendthrift trusts typically contain a provision prohibiting creditors from seizing the trust fund to satisfy the beneficiarys debts. These trusts are legal in most states, even though creditors hate them.

Law Definition Added By: Nathaniel

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