A spendthrift trust is a trust containing a clause that prevents beneficiaries from selling, pledging, or giving away their future interest, and prevents their creditors from seizing it. Until the trustee actually distributes money, it belongs to the trust, and neither the beneficiary nor anyone suing the beneficiary can force it out.
The name reflects the original use case: protecting an inheritance from an heir who spends badly, or from the people that heir owes. If a beneficiary goes through a divorce, a bankruptcy, or a lawsuit, the trust assets stay out of reach. The beneficiary's creditors can typically intercept distributions once they are made, but they cannot accelerate them or attach the trust fund itself.
The important limit in most of the United States and England: you cannot be your own beneficiary. A self-settled spendthrift trust, where the person who funds the trust also benefits from it and claims protection from their own creditors, is void in the majority of US states. That single rule is the reason offshore asset protection exists as an industry. Jurisdictions like the Cook Islands, Nevis, and Belize expressly permit self-settled spendthrift trusts by statute, letting a settlor remain a beneficiary of the trust that protects assets from their own future creditors. A minority of US states (Nevada, South Dakota, Delaware, and about seventeen others) allow domestic versions, though these remain exposed to other states' judgments in a way offshore structures are not.
Nearly every serious trust, offshore or onshore, includes spendthrift language as a matter of course. The clause costs nothing to include and turns the trust into a barrier rather than a bank account with extra steps.
Related terms: discretionary trust, fraudulent conveyance, settlor.