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 South Carolina, a spendthrift trust is a legal tool that allows a grantor to place assets in a trust with specific provisions that prevent the beneficiary from squandering the trust's assets. These provisions restrict the beneficiary's ability to assign their interest in the trust to others, whether voluntarily or as collateral for debt, and also protect the trust's assets from being accessed by the beneficiary's creditors. South Carolina law recognizes the validity of spendthrift trusts under certain conditions, as outlined in the South Carolina Trust Code. The code stipulates that a spendthrift provision is enforceable to prevent both voluntary and involuntary transfer of a beneficiary's interest. However, there are exceptions where creditors can breach spendthrift protections, such as claims for child support, alimony, or services provided to protect the beneficiary's interest in the trust. It's important to note that while spendthrift trusts offer a degree of asset protection, they must be properly structured and comply with state law to be effective.