In a Sale
What This Means When the House Is Being Sold
Where a trust holding real property includes spendthrift language, it generally affects the beneficiaries' rights to the property or its eventual sale proceeds, but it does not typically restrict the trustee's own authority to sell the property itself in the ordinary course of administering the trust. Confusion between the two, a beneficiary's protected interest in trust assets versus the trustee's operational power to manage and sell them, is common and worth clarifying early with the trust's attorney.
Where sale proceeds are distributed to a beneficiary subject to spendthrift protection, they are frequently held and disbursed by the trustee over time or according to specific trust terms, rather than paid out entirely at once the way an unrestricted distribution might be.
Compare
Not to Be Confused With
- This TermSpendthrift Trust
- Often Mistaken ForIrrevocable Trust
- Often Mistaken ForTrustee
- Often Mistaken ForSuccessor Trustee
What Tells Them Apart
A spendthrift trust is typically a form of irrevocable trust built around this specific protective feature, though not every irrevocable trust includes spendthrift language. Trustee and Successor Trustee describe who administers the trust and generally retains authority to sell trust property, a power the spendthrift provision does not usually restrict even though it does restrict the beneficiary's own interest.
Nevada
In Nevada
Nevada is known for particularly strong spendthrift trust protections under state law, which some families choose specifically for that reason.
Questions
Questions People Ask
Does a spendthrift provision stop a trustee from selling the trust's real estate?
Generally not. Spendthrift language restricts a beneficiary's own interest in trust assets and protects it from that beneficiary's creditors, but it typically does not limit the trustee's authority to manage and sell trust property as part of ordinary administration. The trust's own terms should still be read to confirm this for a specific trust.