A spendthrift trust is a trust that protects a beneficiary from reckless spending. You may be lucky enough that all of your beneficiaries know the value of and practice money management. However, if you aren’t so lucky and one of your beneficiaries has trouble with their spending habits, you can protect them from themselves, as well as from their creditors.
Spendthrift trusts are designed as a vehicle for you to provide assets to a loved one, and at the same time give provision for protection of those assets because your loved one has shown that they have an incapacity to protect the assets themselves. Spendthrift trusts are created to prevent a beneficiary from taking their interest in the trust, as well as to prevent creditors of the beneficiary from getting to any of the trust funds until they are dispersed to the beneficiary.