Which trust is described as a spendthrift trust created by the grantor to protect the grantor's assets from the grantor's creditors?

• A. Spendthrift trust
• B. Self-settled spendthrift trust
• C. Irrevocable life insurance trust
• D. Revocable living trust

Answer: (B)

The concept being tested is asset protection through a spendthrift structure created by the grantor to shield the grantor’s own assets from their creditors. A self-settled spendthrift trust is exactly that: the grantor funds and creates the trust and tries to protect those assets from the grantor’s creditors by including a spendthrift restriction. That’s why this option best fits the description.

The other options don’t fit as well. An irrevocable life insurance trust is mainly about removing life insurance from the taxable estate and planning around estate taxes, not specifically about shielding the grantor’s assets from their own creditors. A revocable living trust is under the grantor’s control and typically provides little to no protection from creditors, since the grantor can revoke or modify it and retain access to the assets.