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 Oregon, 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. Oregon law recognizes spendthrift trusts and includes provisions that protect the trust's assets from the beneficiary's creditors, except in certain situations such as a claim for child support, spousal support, or a government claim. The spendthrift provision in the trust explicitly restricts the beneficiary's ability to transfer their interest in the trust, either voluntarily or involuntarily, ensuring that creditors cannot reach the trust assets to satisfy the beneficiary's debts. This type of trust is particularly useful for beneficiaries who are not financially responsible or who may face potential creditor issues. It is important to note that the creation and administration of spendthrift trusts must comply with Oregon's trust laws, and an attorney can provide guidance to ensure that the trust is established correctly and operates within the legal framework.