A provision which typically prohibits:  Beneficiary from transferring right to future payments of income or principal.  Beneficiary’s creditors from subjecting the beneficiary’s interest to the payment of their claims.

 Protect beneficiary (asset protection).  Allow settlor to have trust property used as settlor intended.  Note: No requirement that beneficiary “needs” protection.

 Interest protected only while in the trust.  Once trustee pays beneficiary, beneficiary may transfer and creditors may reach.

 No particular language needed as long as settlor’s intent is clear.  Paraphrase § (a).  “The beneficiary’s interest shall be held subject to a spendthrift trust.” § (b).

 1. Settlor = Beneficiary  Settlor cannot protect his/her own property from his/her creditors. § (d).  Booth – p. 88.  Many offshore and some states allows self- settled spendthrift trusts.

 2. Necessaries  Not codified but some pre-Code cases may support this exception.

 3. Child Support  Family Code § ▪ Court has discretion to “break” spendthrift protection for child support. ▪ If distribution mandatory, up to mandatory amount. ▪ If distribution discretionary, up to entire income.  Impact of exception. ▪ Methods of drafting to avoid impact.

 4. Federal Tax Claims

 5. Compliance with agreement settling trust issues.

 6. Other jurisdictions  Tort Claimants.  Always ineffective.

 If settlor is not the beneficiary, merger will not occur with spendthrift trust.  Court will appoint new trustee to keep title split.