Spendthrift Trust: Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated September 2026.

A spendthrift trust bars a beneficiary from selling, giving away, or pledging their interest in the trust, and it keeps most creditors from reaching trust money before it’s actually paid out. California enforces these provisions, with statutory exceptions for a handful of claims.

How it works in California

See how spendthrift protection holds up against creditors in California for the fuller picture. The core rule is simple: Prob. Code, § 15300 makes a restraint on the voluntary or involuntary transfer of a beneficiary’s interest in income enforceable, and section 15301 does the same for principal, meaning most creditors can’t force a beneficiary to hand over trust income or principal before the trustee distributes it.

The protection isn’t absolute. Sections 15305, 15305.5, and 15306 carve out exceptions for support obligations, restitution to a crime victim, and reimbursement claims by a public entity. And when a judgment creditor goes after payments the beneficiary is entitled to receive from the trust, section 15306.5(b) caps what a court can order the trustee to pay over: “an amount exceeding 25 percent of the payment that otherwise would be made to, or for the benefit of, the beneficiary.”

Why it matters

A spendthrift clause is standard in most California trusts, and it does real work. For example, a beneficiary who runs up a large credit card judgment generally can’t be forced to assign their future trust distributions to the creditor, and a court order reaching the payments the beneficiary is entitled to is capped at a quarter of each payment. That statutory cap doesn’t reach money once it’s actually in the beneficiary’s hands.

Common mistakes

Believing the protection blocks every kind of creditor, including a former spouse owed support or a public entity with a reimbursement claim. Assuming the shield still works once money has actually reached the beneficiary’s hands. Treating the 25 percent cap in section 15306.5 as a general limit on what any creditor can ever reach, rather than a cap tied to payments the trust makes to the beneficiary.

Related terms

• Irrevocable Trust: spendthrift protection matters most in trusts, often irrevocable ones, that hold a beneficiary’s share for years.
• Special Needs Trust: a special needs trust relies on the same kind of restraint to keep trust assets from being treated as the beneficiary’s own resources.
• Trust Protector: a trust protector’s powers are sometimes used to adjust distribution terms without disturbing a trust’s spendthrift protection.

Part of the California estate planning glossary. For the full treatment, see Spendthrift Trusts and Creditor Protection in California.