What is a spendthrift provision?

A spendthrift provision is a clause in a trust or estate document that limits the beneficiary’s ability to transfer the assets in the trust or estate. Put simply, it prevents the beneficiary from spending or giving away the assets to someone else before they can be used as intended by the creator of the trust or estate. In the state of Washington, a spendthrift provision is created when the creator of the trust or estate (the “settlor”) explicitly states that the assets of the trust or estate will not be available to the beneficiary until they are of a certain age, or until a certain event occurs. These provisions are designed to protect the beneficiary from themselves by reducing their ability to spend or give away the assets of the trust or estate, instead of using them as the settlor intended. They also protect against creditors or potential lawsuits, as creditors would be unable to recover money from the assets in the trust or estate. Spendthrift provisions can vary from trust or estate to trust or estate, but Washington is one of a few states that have codified the requirements for a spendthrift provision to be valid. These requirements include the presence of language specifically stating that the trust or estate assets are not available to the beneficiary, and that any transfer of the assets must be for the benefit of the beneficiary. In cases where a spendthrift provision is not included in a trust or estate document, Washington law allows courts to impose a spendthrift provision to protect the beneficiaries of the trust or estate.

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