What is a spendthrift provision?

A spendthrift provision is a provision that is often included in a trust to protect trust assets from creditors. This provision declares that the trust assets are not available to the creditors of the beneficiary, the person who receives the benefits from the trust. It is meant to protect the trust assets from being taken away and used to pay for the beneficiary’s debts. A spendthrift provision is commonly included in revocable living trusts, a type of trust commonly used for estate planning in California. This type of trust allows the grantor, the person who creates the trust, to control the assets of the trust during their lifetime and to change or revoke the trust if desired. The grantor can also specify a spendthrift clause which cannot be changed or revoked during the grantor’s lifetime. This clause prevents the creditors of the beneficiary from seizing the assets of the trust without an order from the court. A spendthrift clause also helps protect the beneficiary’s assets if the beneficiary is irresponsible with their money or is likely to get into financial trouble. The trust assets are protected from being taken away for the benefit of the creditor and remain in the trust for the benefit of the beneficiary.

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What is a spendthrift provision?

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