Wills and Trusts Bar Exam 2025 – 400 Free Practice Questions to Pass the Exam

The primary purpose of a spendthrift trust is to restrict a beneficiary's access to the trust principal in order to protect those assets from creditors. This type of trust is designed to prevent beneficiaries from recklessly spending the trust assets, which could leave them financially vulnerable. By placing limitations on how and when a beneficiary can access the trust funds, the trust protects those assets from claims made by the beneficiary's creditors.

In a spendthrift trust, the trustee has control over the disbursement of funds, which means that creditors cannot directly reach the assets of the trust as long as they remain in the trust. This feature is particularly important for beneficiaries who may struggle with financial management, ensuring that the trust assets are preserved and utilized for their intended purpose over an extended period.

Other options do not align with the specific function of a spendthrift trust. For example, redistributing estate assets is more aligned with intestate succession or certain types of trusts that focus on equitable distribution. Ensuring equal shares among beneficiaries typically reflects a different goal, such as equitable distribution under a will or another form of trust without protections against creditor access. Lastly, managing estate taxes is typically addressed through specific estate planning strategies rather than through the mechanics of a spendthrift trust.