The Bank should exercise caution in lending to the beneficiary of a trust. Many trusts are so-called “spendthrift” trusts which specifically prohibit the beneficiary from pledging the trust interest as collateral for a loan and protect the trust interest from the beneficiary’s creditors. The Trust Agreement should be carefully reviewed to determine the extent to which the beneficiary’s interest can be pledged. The Bank may, for example, make a loan to a trust beneficiary (based on his or her trust income) to buy a car or home and take a security interest in the car or home (but not the trust interest).