Spendthrift trust / spendthrift provision
A clause (more than a standalone trust type) that prevents the beneficiary from assigning their interest and blocks creditors from reaching trust assets until they are actually distributed. Most modern trusts include one by default.
"Spendthrift trust" is a misnomer for most purposes — it usually describes a clause included in an otherwise-standard trust (revocable or irrevocable) rather than a separate trust type. The clause says the beneficiary cannot assign, pledge, or anticipate their interest in the trust, and no creditor of the beneficiary can reach the trust assets until the trustee actually distributes them to the beneficiary.
What it protects against: the beneficiary's voluntary transfers (selling their future interest for cash today), ordinary creditors (judgment creditors, ex-spouses, tort victims, bankruptcy trustees) reaching trust assets, and the beneficiary's own bad decisions with money.
What it does NOT protect against: the grantor's own creditors (a grantor cannot shield their own assets behind a spendthrift clause — see self-settled rules), certain "super-creditors" (child support, alimony, tax claims) which can breach the spendthrift shield in most states, and distributions that have already been made.
Most modern estate-planning attorneys include a spendthrift clause in every trust they draft unless there is a specific reason not to. Tagged 🟡 — the clause itself is simple, but the decision to include it and the interplay with other provisions is what attorneys earn their fees for.
State-specific notes
Virginia enforces spendthrift provisions under § 64.2-743 but allows certain exception creditors (child support, alimony, tax, judgments for necessaries) to breach the shield.
West Virginia enforces spendthrift provisions under § 44D-5-502 (Uniform Trust Code § 502) with the same exception-creditor categories.
Alabama expressly recognizes spendthrift trusts at Ala. Code § 19-3B-502, restraining both voluntary and involuntary transfers of a beneficiary's interest. Exceptions in Ala. Code § 19-3B-503 allow creditor reach for child-support and spousal-maintenance claims and certain judgments for services benefiting the beneficiary. The settlor's own creditors can still generally reach the maximum amount distributable to the settlor under Ala. Code § 19-3B-505 unless the trust qualifies as a Qualified Disposition under the Alabama DAPT statute.