(a) A spendthrift provision is valid only if it prohibits both voluntary and involuntary transfer of a beneficiary‘s interest.
     (b) A term of a trust providing that the interest of a beneficiary is held subject to a “spendthrift trust”, or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary’s interest.

Terms Used In Illinois Compiled Statutes 760 ILCS 3/502

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Trustee: A person or institution holding and administering property in trust.

     (c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and, except as otherwise provided in this Article, a creditor or assignee of the beneficiary may not reach the interest or a distribution by the trustee before its receipt by the beneficiary.
     (d) A valid spendthrift provision does not prevent the appointment of interests through the exercise of a power of appointment.