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 Ohio, 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. Ohio law recognizes the validity of spendthrift provisions in trusts, which are designed to protect the trust's assets from the beneficiaries' creditors and from the beneficiaries themselves if they are not financially responsible. Under Ohio Revised Code Section 5805.01, a spendthrift provision is enforceable to prevent voluntary or involuntary transfer of a beneficiary's interest. This means that beneficiaries cannot use their interest in the trust as collateral for loans, nor can creditors typically reach these assets to satisfy debts. However, there are exceptions to this protection, such as claims for child support, alimony, or services provided to protect the beneficiary's interest in the trust. It's important to note that while spendthrift trusts offer a degree of asset protection, they must be properly structured and operated in accordance with Ohio law to ensure their effectiveness.