Which statement about spendthrift trust transfer restrictions is true?

• A. Beneficiaries can freely transfer their interests.
• B. Beneficiaries cannot voluntarily transfer their interests.
• C. Creditors can always reach the trust assets.
• D. The trustee must sell assets immediately.

Answer: (B)

Spendthrift transfer restrictions guard against a beneficiary alienating their future interest in the trust. A spendthrift clause prevents the beneficiary from voluntarily transferring or pledging that interest, so they can’t sell or assign the right to future distributions. This protects the trust assets from being frittered away and, to some extent, from creditors who might try to reach those interests before distributions are made. The trustee is responsible for managing and distributing assets according to the trust terms, not for selling everything immediately. Creditors generally can’t reach trust assets to satisfy the beneficiary’s debts, though there are exceptions depending on jurisdiction and the trust’s specifics. So the statement that best captures the effect is that beneficiaries cannot voluntarily transfer their interests.