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 Virginia, 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 assets. Virginia law recognizes the validity of spendthrift provisions in trusts, which are designed to protect the trust's assets from the beneficiaries' creditors and from the beneficiaries themselves if they are not financially responsible. Under Virginia Code § 55-545.05, a spendthrift provision is enforceable to restrain both voluntary and involuntary transfer of a beneficiary's interest. This means that beneficiaries cannot use their interest in the trust as collateral for loans, nor can creditors reach these interests to satisfy debts. However, there are exceptions to this protection, such as claims by a child or spouse for support, claims by the state for services provided, or if the beneficiary is the trustee and has the discretion to make distributions to themselves.