A spendthrift trust is a trust in which the person who makes the trust and places property or assets in it (the grantor, settlor, or trustor) includes a provision that prohibits the beneficiary’s interest in the trust from being assigned to another person or entity—whether as a gift or as collateral for a loan or debt—and prevents a creditor from reaching or attaching the beneficiary’s interest in the trust.

A spendthrift is a person who spends money wastefully or foolishly and a spendthrift provision in a trust (a spendthrift trust) is designed to preserve the trust’s assets and protect the beneficiary from the beneficiary’s spendthrift ways.

In Rhode Island, a spendthrift trust is a legal tool used to protect a beneficiary's interest in a trust from creditors and from the beneficiary's own potentially imprudent spending. Under Rhode Island law, specifically Rhode Island General Laws § 18-9.2-1 et seq., spendthrift provisions are recognized and enforceable. These provisions prevent the beneficiary's interest from being assigned to others and protect the trust assets from being claimed by creditors for the beneficiary's debts, with certain exceptions such as claims for child support, alimony, or services provided to protect the beneficiary's interest in the trust. The trust's assets are managed by a trustee, who has the discretion to make distributions to the beneficiary in a manner consistent with the trust's terms and the spendthrift provision. It's important to note that while spendthrift trusts offer protection, they must be properly structured and operated to ensure they comply with applicable laws and achieve the intended asset protection.