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What is a spendthrift provision in a Will or Trust?

| Jan 7, 2014 | Probate |

A “spendthrift provision” is a provision in a Trust or a Will that protects a beneficiary from assigning away his or her inheritance and it also protects against a creditor attaching the beneficiary’s inheritance. 

A “spendthrift provision” is a provision in a Trust or a Will that states that if a beneficiary has agreed or pledged to turn over to a third party a gift the beneficiary expects to receive, the Trustee or Personal Representative shall not honor such a pledge. The purpose is to prevent a beneficiary from using a potential gift as security for credit on a speculative or bad investment. An extension of the protection offered by a spendthrift provision includes protection from a beneficiary’s creditors being able to force a Trustee or Personal Representative to pay the beneficiary’s share to the creditor instead of to the beneficiary. In Florida, a spendthrift provision is valid only if the provision restrains both voluntary and involuntary transfer of a beneficiary’s interest. When a Trust provides that the interest of a beneficiary is held subject to a spendthrift trust, or words of similar import, that is sufficient. In Florida, the statutory provision addressing certain terms of spendthrift provisions can be found at Section 736.0502, Fla. Stat. 

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