Article on Trust Spendthrift Provisions

Al W. King III recently published an Article entitled, The Trust Spendthrift Provision—Does It Really Protect?, Tr. & Est. (Dec. 2016). Provided below is a summary of the Article:

Most jurisdictions offer some form of asset protection for both self-settled and third-party trusts through the incorporation of spendthrift provisions. In fact, traditional asset protection has typically relied on the spendthrift clause. But, there’s been recent precedent to suggest certain exception creditors may pierce the spendthrift. Consequently, many states have uniquely addressed the potential issues with the spendthrift clause by enacting discretionary support statutes so that a discretionary interest in trust isn’t a property right or an entitlement. This adds another layer of asset protection that may not be provided for by the traditional spendthrift clause.