What is a spendthrift provision in a Pennsylvania trust?

Under Pennsylvania law, specifically 20 Pa.C.S. § 7742, a spendthrift provision is a clause that prevents a beneficiary from voluntarily or involuntarily transferring their interest in a trust. This legal mechanism is designed to protect trust assets from being seized by a beneficiary's creditors or signed away by the beneficiary themselves before the funds are actually distributed. Learn more about Pennsylvania wills.

Can creditors seize money from a spendthrift trust?

Generally, creditors cannot reach assets held within the trust or intercept pending distributions while they remain under the control of the trustee. However, this protection is not absolute. Once the trustee distributes the funds directly to the beneficiary, those specific assets are no longer protected by the spendthrift clause and become available for creditors to pursue. Learn more about Pennsylvania wills.

Are there specific debts that a spendthrift clause cannot block?

Yes, Pennsylvania law recognizes certain exceptions where a spendthrift clause can be pierced. These include claims for child support and alimony, federal tax liens, and, in certain circumstances, restitution claims. In these specific cases, the legal system allows these creditors to reach the trust interest despite the protective language in the trust document. Learn more about Pennsylvania wills.

Can I create a spendthrift trust to protect my own assets from my creditors?

No. Pennsylvania does not allow for self-settled spendthrift trusts, meaning you cannot create one for your own benefit to shield assets from your own creditors. There is currently no Domestic Asset Protection Trust (DAPT) statute in Pennsylvania. While other states offer these jurisdictions, a trust created for the settlor's own benefit will not provide spendthrift protection under PA law. Learn more about Pennsylvania irrevocable trusts.

Pennsylvania Spendthrift Trusts

By Sean Quinlan, Esq. · Updated January 15, 2025

Pennsylvania revocable living trust binder on a Camp Hill attorney's walnut desk

A spendthrift provision restrains a beneficiary from voluntarily or involuntarily transferring their trust interest. Pennsylvania enforces them under 20 Pa.C.S. § 7742.

What it does

Creditors of the beneficiary generally cannot reach the trust assets or pending distributions. Once distributed, funds become fair game.

Exceptions

Child support, alimony, federal tax liens, and (in some cases) restitution claims can pierce a spendthrift clause.

Self-settled

Pennsylvania does not allow a settlor to create a spendthrift trust for the settlor's own benefit (no PA DAPT statute). Out-of-state jurisdictions can be used with care.

Frequently asked

Common questions

Disclaimer

This article is general information about Pennsylvania law as of the update date above. It is not legal advice for your situation and does not create an attorney-client relationship. For advice on your specific facts, please schedule a consultation.

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