Spendthrift Clauses

question 50

Multiple Choice

Spendthrift clauses:

• A) restrict the voluntary or involuntary transfer of a beneficiary's interest in a trust.
• B) prevent creditors who have furnished necessaries from compelling payment.
• C) enable a person to put their own property beyond the claims of their own creditors.
• D) prevent divorced spouses from claiming alimony.

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Definitions:

Long-Term Loss

A loss realized from the sale of an asset held for more than one year, which can offset long-term capital gains.

Short-Term Loss

A financial loss realized on the sale of an asset held for one year or less, used to offset capital gains and reduce taxable income.

Single Category Average

A measure that represents the average value within a specific, singular category of data.

Investment Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.