What is a spendthrift trust?

A spendthrift trust is a legal arrangement created by an individual in the state of Washington which places assets into a trust managed by a trustee and designed to provide financial support to a designated beneficiary. The trust is created to protect the assets from creditors and those attempting to attach or seize the assets. The trust typically includes a stipulation limiting the beneficiary’s ability to use or transfer the trust’s assets without the trustee’s permission. This restriction is often called a “spendthrift clause.” In Washington, the spendthrift clause limits the beneficiary from incurring large debts or from transferring the trust’s assets to a third party. The trust may remain in place for a specified period of time or forever as determined by the trustor. The trustor can also impose additional restrictions designed to protect the beneficiary’s interest, such as restrictions preventing the beneficiary from engaging in frivolous purchases, gambling, or other activities which could endanger the trust’s assets. Trusts are commonly established in Washington to ensure the beneficiary’s financial security after the trustor’s death and before they receive their inheritance. Spendthrift trusts are especially important if the beneficiary is a minor or if the age difference between the trustor and beneficiary is too great.

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What is a spendthrift trust?

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