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Domestic US Trusts

Self Settled Spendthrift Trust

A Self Settled Trust often referred also as a Spendthrift Trust or Trust with Spendthrift Provision, is a trust formed for the benefit of the person who created the trust.  It is thee spendthrift provision that attempt to disallow a creditor from invading the trust assets or forcing a distribution to the beneficiary that the creditor would then seize.

 When a person creates a trust for their own benefit, they have established a self-settled trust.  The trust agreement will have provisions that prevent creditors from the reaching the interest in the trust assets.  This is done with a spendthrift provision.  Commonly this is also known as an asset protection trust or a domestic asset protection trust.

 A spendthrift provision is a clause that provides for a person who in either incapacitated or unable to handle and control their money that disallows creditors claims against the assets of the trust.  Historically these type of trusts were mostly used for a disabled person or an irresponsible person receiving the benefits from a trust.

The creator of a trust is a trustor, grantor or settlor of a trust.  The person who receives the benefits of the trust is the beneficiary.  Usually a third independent party acts as trustee and authority to make decisions about the trust funds.

A spendthrift is an irrevocable provision that protects the trust and the beneficiary in the event a beneficiary is sued and a creditor attempts to attach to the beneficiaries interest in the trust.