What is a spendthrift trust?

A spendthrift trust is a type of trust designed to protect the assets held within the trust from being misused or taken away by creditors. In Texas, a spendthrift trust is set up so that the trust’s assets can be managed by a trustee, while the beneficiary retains certain rights to the assets. This type of trust is designed to protect the beneficiary from the beneficiary’s own bad decisions or creditors attempting to seize the assets. In a spendthrift trust, the beneficiary has the right to receive any income generated from the trust, but the beneficiary does not have the power to transfer, sell, or pledge the assets. This prevents creditors from taking the assets, while allowing the beneficiary to benefit from the trust. Spendthrift trusts are especially beneficial in cases where elderly individuals need significant legal protection from the risks posed by bad decisions or creditors. They are also beneficial for those individuals who need protection from asset seizures due to medical bills or other debts. A spendthrift trust provides peace of mind for the beneficiary and their families, as well as a secure way to manage assets that might otherwise be at risk.

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What is a spendthrift trust?

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