A declaration in a trust that the interest of a beneficiary shall be held subject to a spendthrift trust is sufficient to restrain voluntary or involuntary alienation of a beneficial interest by a beneficiary to the maximum extent provided by law. Regardless of whether a beneficiary has any outstanding creditor, a trustee of a spendthrift trust may directly pay any expense on behalf of such beneficiary and may exhaust the income and principal of the trust for the benefit of such beneficiary. No trustee is liable to any creditor for paying the expenses of a beneficiary of a spendthrift trust.
S.D. Codified Laws § 55-1-35
Trust declaration that beneficiary's interest subject to spendthrift trust--Payment of beneficiary expenses
Applied in 3 court decisions — leading case In re Cleopatra Cameron Gift Trust (2019)
Most recently applied in PLAINS COMMERCE BANK, INC. v. BECK (February 2023)
Source: SL 2007, ch 280, § 12; SL 2011, ch 212, § 34.
Official source: South Dakota Legislature. Reproduced from public-domain South Dakota statutes; confirm against the official source for the current text. Not legal advice.