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Trusts • Transfer of Interests
TRUSTS#016
Legal Definition
Generally, a beneficiary cannot transfer their spendthrift trust to another, but some courts recognize a beneficiary's instruction to a trustee to pay an assignee (which the beneficiary can revoke prior to payment).
Plain English Explanation
A spendthrift trust prevents an irresponsible beneficiary from risking the property or money within the trust. Thus, they generally cannot transfer the trust to someone else. Why? Because if they could, then they could sell their right to the trust or a creditor could try to attack the trust to pay the beneficiaries' debts. Both of those scenarios sort of defeat the purpose of a spendthrift trust's protections.
However, in some cases, a court will allow a beneficiary to instruct the trustee who manages the trust to pay someone instead of the beneficiary. Whether the trustee actually does so is ultimately up to them and, if they choose not to, they won't have to fear any sort of consequence (like malpractice).
However, in some cases, a court will allow a beneficiary to instruct the trustee who manages the trust to pay someone instead of the beneficiary. Whether the trustee actually does so is ultimately up to them and, if they choose not to, they won't have to fear any sort of consequence (like malpractice).
Related Concepts
Are discretionary trusts involuntarily alienable?
Are discretionary trusts voluntarily alienable?
Are spendthrift trusts involuntarily alienable?
Are support trusts involuntarily alienable?
Are support trusts voluntarily alienable?
What is a discretionary trust?
What is a self-settled spendthrift trust and how do most jurisdictions deal with them?
What is a spendthrift trust?
What is a support trust
