A spendthrift trust is a trust in which the person who makes the trust and places property or assets in it (the grantor, settlor, or trustor) includes a provision that prohibits the beneficiary’s interest in the trust from being assigned to another person or entity—whether as a gift or as collateral for a loan or debt—and prevents a creditor from reaching or attaching the beneficiary’s interest in the trust.

A spendthrift is a person who spends money wastefully or foolishly and a spendthrift provision in a trust (a spendthrift trust) is designed to preserve the trust’s assets and protect the beneficiary from the beneficiary’s spendthrift ways.

In Delaware, a spendthrift trust is a legal tool that allows a grantor to place assets in a trust with specific provisions that prevent the beneficiary from squandering the assets. Delaware law recognizes the validity of spendthrift provisions in trusts, which restrict the beneficiary's ability to transfer their interest in the trust and also protect the trust assets from the beneficiary's creditors. Under Delaware Code Title 12, Trusts and Estates, spendthrift provisions are enforceable, and creditors generally cannot reach the assets in the trust to satisfy the debts of the beneficiary, with certain exceptions such as claims for child support, alimony, or services provided to protect the beneficiary's interest in the trust. Delaware is known for its favorable trust laws, and many people choose to establish trusts in the state for its asset protection features.