What Is The Spendthrift Clause In Life Insurance? 
A spendthrift clause is occasionally used in a trust . It limits the ability of the beneficiary of a trust to promise all or part of the trust to a third party prior to the death of the person forming the trust . This is done to stop a young beneficiary from foolhardy investments based upon future funding of a trust from his doting aunt in Maine . The trustee is instructed to give money to the beneficiary and to deny all claims by third party interests . 