The law in most states (Nevada excluded) provides that the creditors of a trust settlor can attach the settlor’s assets transferred in trust if the trustee has the authority to distribute property back to the settlor.

This means that if the settlor of a spendthrift trust is also a beneficiary, the settlor’s creditors can reach the settlor’s beneficial interest in the trust, and in some cases the entire trust corpus, in satisfaction of the settlor’s debts and obligations. Thus, most states do not recognize the validity of the so-called “self-settled” spendthrift trust. This is one of the reasons why assets in a typical living trust are not protected from creditors while the settlor is still alive.