spendthrift trust

spendthrift trust definition - legal

n

Trust benefiting an individual who is financially irresponsible; grantor of the trust may establish limitations on use of money to pay debts, or may provide for direct payment to creditors, completely bypassing the beneficiary.  Some states permit a spendthrift trust to state as part of its terms that creditors may not invade the trust to satisfy the debts of the beneficiary. 

Webster's New World Law Dictionary Copyright © 2006 by Wiley Publishing, Inc., Hoboken, New Jersey.
Used by arrangement with John Wiley & Sons, Inc.

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