Trust protectors are a fairly new and commonly used protection in the United States. In short, a trust protector is someone who serves as an appointed authority over a trust that will be in effect for a long period of time. Trust protectors ensure that trustees: maintain the integrity of the trust, make solid distribution and investment decisions, and adapt the trust to changes in law and circumstance.
Whenever changes occur, as they are bound to do, the trust protector has the power modify the trust to carry out the trust maker’s intent. Significantly, the trust protector has the power to act without going to court – a key benefit which saves time and money and honors family privacy.
Here are 6 Key Ways a Trust Protector Can Help You
Your trust protector can:
1. Remove or replace a difficult trustee or one who is no longer able or willing to serve
2. Amend the trust to reflect changes in the law
3. Resolve conflicts between beneficiaries and trustee(s) or between multiple trustees
4. Modify distributions from the trust because of changes in beneficiaries' lives such as premature death, divorce, drug addiction, disability, or lawsuit
5. Allow new beneficiaries to be added when new descendants are born
6. Veto investment decisions which might be unwise
The key to making a trust protector work for you is being very specific about the powers available to that person. It’s important to authorize that person, and any future trust protectors, to fulfill their duty to carry out the trust maker’s intent - not their own.
Can You Benefit from a Trust Protector?
Generally speaking, the answer is yes. Trust protectors provide flexibility and an extra layer of protection for trust maker intent as well as trust assets and beneficiaries. Trust protector provisions are easily added into a new trust and older trusts can be reformed (re-drafted) to add a trust protector. If you have trusts you’ve created or are the beneficiary of a trust that feels outdated, call our office now.