spendthrift trust

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A spendthrift trust is a type of trust designed to restrict the beneficiary’s ability to access or control the trust’s principal or income. The beneficiary is unable to sell or give away their equitable interest in the trust property, and the trustee manages the property. This structure ensures that the trust assets are protected from being squandered by the beneficiary, as well as from creditors or legal judgments. As a result, the beneficiary does not have any control over the property, and creditors cannot reach those assets.

[Last updated in June of 2024 by the Wex Definitions Team]