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 New Hampshire, 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 trust's assets. These provisions restrict the beneficiary's ability to assign their interest in the trust to others and protect the trust's assets from being accessed by creditors. New Hampshire statutes uphold the validity of spendthrift provisions in trusts, as long as they are created in accordance with state laws governing trusts. This means that the assets in a spendthrift trust are generally not subject to claims by the beneficiary's creditors until the assets are distributed out of the trust and into the beneficiary's possession. It is important to note that there are exceptions to this protection, such as claims for child support, alimony, or other specific types of creditors as defined by law. An attorney can provide guidance on the creation and administration of a spendthrift trust to ensure it complies with New Hampshire laws and effectively protects the assets from potential misuse by the beneficiary.