A spendthrift trust is set up for the benefit of a person who is unable to regulate his spending. Such trusts empower an independent trustee to take decisions alone without any say of the beneficiary on the use and application of trust funds for the benefit of the beneficiary. Since trust funds are not under the control of the beneficiary, his creditors cannot attach the same in the execution of a money decree for recovery of dues.
Such trust deed must be clearly worded to manifest the intention of the grantor or donor of the trust to create an irrevocable spendthrift trust. Such provision is known as the spendthrift clause.
A spendthrift clause or provision in an irrevocable trust stands in the way of creditors enforcing a money judgment against trust assets for realization of their outstanding dues from the beneficiary. It has become customary to have spendthrift provisions in irrevocable trusts even though the beneficiary is not a spendthrift. This measure is intended to shield the beneficiary or the trust from execution of money decree against their assets.
However, most states or jurisdictions permit the attachment and application of trust assets to satisfy decree or award of alimony or child support.
Moreover, in most states a self settled spendthrift trust, where the donor himself is the beneficiary of the trust, does not protect the trust assets from creditors. However, in order to attract trusts, some states like Alaska and Nevada have legislated that an individual may set up a self settled spendthrift trust for his own benefit.
(More http://www.thefreedictionary.com/spendthrif)
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