What Is a Trust Protector?

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What Is a Trust Protector?

A trust protector is an individual who is appointed to ensure that the provisions you have outlined in your trust are being carried out according to your wishes. Even if you already have a trustee of your trust, it is to your benefit to have a trust protector in the event that your trustee can no longer be trusted, your trustee is unable to serve as trustee due to incapacity or death, or there are changes in estate and trust law that affect your trust.

Benefits of a Trust Protector

If you have an irrevocable trust, which cannot be changed by the settlor, or creator, of the trust, a trust protector may be able to make any necessary changes to comply with developments in estate law. In addition, if there are any conflicts that occur, your trust protector may be empowered to make any needed amendments without going to court.

In the event your trustee does not wish to distribute assets to one or more of your beneficiaries upon your demise, a trust protector may be able to replace the trustee provided that the trust is drafted in such a way as to give the trust protector this power. In order to further ensure that the provisions of the trust are carried out in accordance with your wishes, you could also appoint a successor who would assume the duties of the original trust protector if he or she dies or can no longer serve in that capacity. If you have an intergenerational trust, your trust protector may be able to add beneficiaries, including grandchildren and great-grandchildren, as well as new assets, to the trust.

Moreover, a trust protector has the ability to observe the investments of your estate assets, and remove a trustee if your funds are being mismanaged. And if there are changes in the estate laws, a trust protector can make any necessary amendments to your trust so as to make certain that it is receiving the maximum tax advantages.

Trust Protector for Special Needs Planning

It is also advisable to have a trust protector for a special needs trust for the benefit of the person with a disability. The trust protector can stay informed of any changes in medical treatment, public benefits, and investments, for the beneficiary. Although the parent of the disabled person is a natural choice for this role, such a person may lack the requisite knowledge of accounting, tax, and estate law.

Should I Consult an Attorney When Choosing a Trust Protector?

When choosing a trust protector, it would be wise to appoint someone who is honest, trustworthy, and capable. It can be the estate planning lawyer who drafted your trust, or if your attorney would prefer not to serve in that role, then he or she may be able to recommend some potential candidates. Some possibilities include a financial planner, accountant, or trust officer of a bank. Since the person should be objective, it is to your benefit to refrain from appointing a beneficiary or trustee.

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Last Modified: 12-17-2014 03:21 PM PST

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