Spendthrift Clause

Spendthrift Clause Definition.  A “spendthrift clause” is a provision in a trust or other testamentary instrument that prevents “spendthrift” beneficiaries from assigning their interest in the trust to third parties.  It may also prevent creditors of beneficiaries from garnishing or attaching the beneficiary’s interest in the Trust.  To be effective, distributions from the trust must be discretionary, not mandatory or age based, and the Trustees must have power to disregard any involuntary demand for distributions.