What does a spendthrift provision in a trust prevent a beneficiary from doing?

A spendthrift provision in a trust is designed to protect the trust assets from being accessed by creditors of the beneficiary and prevents the beneficiary from selling or transferring their interest in the trust. By including this provision, the trust creator ensures that the beneficiary cannot liquidate or assign their interest in the trust for personal debts or to satisfy creditors.

This protective mechanism can help the beneficiary maintain their financial stability by shielding the trust assets from external claims, particularly in cases where the beneficiary might not possess the financial discipline to manage their inheritance responsibly. A spendthrift provision also contributes to ensuring that the trust's intent is honored, allowing the trust assets to be used according to the settlor's wishes rather than being quickly dissipated or subjected to potential creditors' claims.

In contrast, the other choices involve actions that do not fall under the protective scope of a spendthrift provision. For example, buying property in their name or investing in stock markets involves personal decision-making and does not directly relate to the management of the trust assets. Similarly, while taking loans against assets may be financially risky, a spendthrift provision specifically limits the ability to transfer or sell the interest in the trust itself. Thus, the choice regarding the restriction on selling or transferring their interest