Spendthrift Provisions, Generally
A spendthrift provision is a legal instruction that restricts each
beneficiary's ability to assign estate
property, while also preventing each beneficiary's creditors from taking
estate property to satisfy a beneficiary's debts. These restrictions
are only valid while the property is held in the estate or trust.
This is typically used to protect estate assets from the claims of a
beneficiary's creditors, as well as protecting the assets from the
imprudence or immaturity of a beneficiary.
Once the property is given to the beneficiary,
it is no longer covered by the spendthrift provision, because it is owned
outright by the beneficiary and no longer controlled by an executor or
trustee.
Although spendthrift restrictions are valid in Pennsylvania, any income
earned by property covered by a spendthrift provision is liable for the
support of anyone whom the beneficiary has a legal duty to support, such as
a child.
