Alienability of Trust Beneficiaries' Interests

Question 1

Assigning trust rights

Answer 1

Absent a restrictive provision to the contrary, a trust beneficiary may freely assign the equitable title or right to receive income or principal from a trust

Question 2

Types of trusts by how they restrict beneficiaries

Answer 2

(1) support trust
(2) discretionary trust
(3) spendthrift trust

Question 3

Suppor trust

Answer 3

Directs the trustee to provide only so much as is necessary for the beneficiary’s support and for no other purpose

Question 4

Discretionary trust

Answer 4

The trustee pays as much income as the trustee believes desirable

A trustee’s actions pertaining to matters within their discretion are not subject to attack unless there has been an abuse of that discretion or a complete failure to exercise it

Question 5

Spendthrift trust provision

Answer 5

A provision in a trust that says that the beneficiary cannot voluntarily transfer their
property nor can creditor attack it

Question 6

Exceptions to spendthrift trust provision

Answer 6

Cannot be used to defeat a claim of:

▪ Alimony or child support owed by the beneficiary
▪ The provision of necessities to the beneficiary
▪ Government claims against the beneficiary