Self Settled Trust Law and Legal Definition
Self settled trust is a type of trust in which the settlor is also the person who is to receive the benefits from the trust. These are spendthrift trusts that the settlor forms for his or her own benefit. In such trusts, the settlor and beneficiary are one and the same person. This is done for protecting the trust assets from creditors. However most U.S. states does not recognize self-settled trusts.
The following is an excerpt from a State Statute (Oklahoma) on non recognition of self settled trusts:
Nothing in this act shall authorize a person to create a spendthrift trust or other inalienable interest for his own benefit. The interest of the trustor as a beneficiary of any trust shall be freely alienable and subject to the claims of his creditors. [60 Okl. St. § 175.25]
Self-Settled Trusts are commonly known as Asset Protection Trusts.
