Which term describes a trust provision that restricts distributions to protect assets from creditors?

• A. Spendthrift provision
• B. Discretionary provision
• C. Protective clause
• D. Beneficiary restriction

Answer: (A)

Spendthrift provisions are used in trusts to shield assets from creditors by limiting how a beneficiary can access or transfer future distributions. The trustee controls when and how much is distributed, and the beneficiary cannot pledge, sell, or assign their interest in the trust. Because the beneficiary’s right to receive distributions is effectively unassignable, creditors typically can’t reach those funds until a distribution is actually paid out. This protects the trust corpus for its intended purposes and prevents premature or unmanaged depletion of assets. Some debts, like child support or taxes, and protections that vary by state can affect the extent of the shield, but the term itself specifically describes a clause that restricts distributions to safeguard assets from creditor claims. The other options don’t match this creditor-protection mechanism: a discretionary provision focuses on the trustee’s distribution power, a protective clause and a beneficiary restriction are not standard terms with the same creditor-protection meaning.