What is a spendthrift trust?

A spendthrift trust is a type of trust set up to protect the trust assets from being used or spent by people other than the trust beneficiary. This type of trust is often used by people who want to protect their assets from creditors, such as in the event of bankruptcy or a lawsuit. In Minnesota, spendthrift trusts can be created under the “Minnesota Trust Code” which allows for a person to create a trust and appoint a third party, such as a bank or other financial institution, as the trustee. The trustee then holds and invests the assets of the trust for the benefit of the beneficiary, and the beneficiary has no right to access or use the assets of the trust. This type of trust also allows the trust creator to specify conditions for how and when the assets are to be used, including specifying the ages at which the beneficiary can access the trust assets. This can be very beneficial in allowing the trust creator to dictate how their assets are used after they have passed away.

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What is a spendthrift trust?

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