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 Pennsylvania, 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, whether voluntarily or as collateral for debt, and also protect the trust's assets from being accessed by the beneficiary's creditors. Pennsylvania law recognizes the validity of spendthrift trusts under 20 Pa.C.S. § Trusts (Chapter 77). The law provides that a spendthrift provision is enforceable to prevent both voluntary and involuntary transfers of the beneficiary's interest in the trust. However, there are exceptions where creditors may have the right to access trust assets, such as claims for child support, alimony, or services provided to protect the beneficiary's interest in the trust. It is important to consult with an attorney to understand the specific requirements and limitations of setting up a spendthrift trust in Pennsylvania.