A trust designed to protect beneficiaries from their own poor financial decisions and creditors by restricting their ability to transfer their interest in the trust. The trustee controls distributions, and creditors generally cannot reach the trust assets to satisfy the beneficiary's debts.
Combines 'spendthrift' (from 16th century 'spend' + 'thrift,' meaning one who wastes money) with 'trust.' This legal device developed in 19th century America as wealthy families sought to protect inheritances from spendthrift heirs and their creditors.
The irony is delicious: spendthrift trusts protect money FROM the very people who inherit it! Originally created for gambling-addicted Victorian heirs, these trusts now shield assets from divorces, lawsuits, and bankruptcy—making them popular with everyone from lottery winners to doctors fearing malpractice suits.
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