Also known as: unthrifts · spendthrift
Written by attorneys · grounded in primary & secondary sources — see below
An archaic designation for a person who wastes or squanders property. In trust law the label identifies a beneficiary whose interest a spendthrift provision shields from both voluntary assignments and involuntary creditor claims.
Usha Upton, an unthrift beneficiary, tried to assign future trust distributions to a lender. The trust instrument restrained both voluntary and involuntary transfers of her interest. The restraint qualified as a spendthrift provision, rendering the assignment ineffective.
Uliana Ustinova, an unthrift, owed a judgment creditor. The creditor asked the court to attach present and future distributions because no spendthrift provision protected her interest. The court authorized attachment limited to amounts appropriate under the circumstances.
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Ursula Ung created a trust stating that the beneficiary's interest could not be assigned or reached by creditors. Usman Uddin, the unthrift beneficiary, later attempted a voluntary transfer. The clause satisfied the requirement that a spendthrift provision restrain both voluntary and involuntary transfers.
Una Unger, an unthrift beneficiary, sought to pledge her interest as collateral. The trust stated that her interest was held subject to a spendthrift trust. That phrasing was sufficient to restrain both voluntary and involuntary transfers.
Umeko Uchida, an unthrift beneficiary, faced a creditor seeking to compel distributions. The trustee held sole discretion over distributions for her support. The creditor could not force a distribution even though the trust lacked a spendthrift provision.
Ulysses Upton, an unthrift beneficiary, obtained a final judgment protecting his trust interest from creditors. A later statute attempted to reopen that specific judgment for further creditor claims. The court refused to disturb the completed decision protecting the unthrift's shielded interest.
The term is an archaic designation for a prodigal or spendthrift. It identifies a person who wastes property and whose beneficial interest in a trust a spendthrift provision is designed to protect.
An unthrift beneficiary is one whose wasteful habits prompt the settlor to include a spendthrift provision. The provision prevents the beneficiary from assigning the interest and shields it from creditors until distributions are actually received.
No. The trust instrument must contain language that restrains both voluntary and involuntary transfers. Words stating that the interest shall not be anticipated, assigned, or reached by creditors are sufficient even if the term spendthrift trust is not used.
Yes. Once the trustee distributes cash or property to the beneficiary, the assets lose trust protection and become subject to ordinary creditor remedies.
…v. Valeo , 424 U. S. 1 (1976); INS v. Chadha , 462 U. S. 919 (1983); Bowsher v. Synar , 478 U. S. 714 (1986); Plaut v. Spendthrift Farm, Inc., ante , p. 211. These standards are by now well accepted. Judicial review is also established beyond question, Marbury v. Madison , 1 Cranch 137 (1803), and though we may differ…