Could Your Estate Plan Use a Trust Protector?

Every trust that you set up must have a trustee, and for most trusts, it’s just as easy as that: you’ll establish a trust (whichever type works for your situation), name a trustee to oversee and administer the trust, and fund the trust.

But there are some situations where trusts get a bit more complex. Imagine these situations:

• You have multiple relatives, and they all want some say in how to administer the trust you’ve set up
• You have multiple assets, each with its own required level of expertise, and there isn’t one person who could be the trustee, that has knowledge in all of these areas
• The property you are leaving in your trust, takes special, technological, or financial knowledge
• You need multiple trusts, and want to divide trustee responsibilities among numerous people
• The rules you establish for the trust(s) need to be flexible to account for changing life situations, or changing laws

In all of these situations, the one-trust, one-trustee model may not do the trick. That’s where the concept of a trust protector comes into play.

What is a Trust Protector?

A trust protector is someone you name in your estate plan. That person oversees the trustee, or multiple trustees. The trust protector can, but doesn’t have to, actually administer or oversee any trust you establish. The protector simply makes sure that the trustees you have named are doing what they are supposed to do.

Think of the trust protector as the “trustee for other trustees.” For example, the trust protector makes sure that the other trustees are abiding by the rules of the trusts, and that they aren’t breaking their fiduciary duties, or engaging in self dealing or other prohibited activities.

The trust protector has other powers as well, including the ability to modify the rules of the trust, in limited circumstances, to account for changed or unforeseen situations that may arise. Similarly, if there is confusion or ambiguity in something you drafted in the rules of the trust, the trust protector often acts as a neutral, resolving disputes or interpreting ambiguities.

In serious cases, the trust protector can remove trustees, although that often requires the trust protector to file an action in court.

Because you want them to be neutral, and because they often require oversight of complex assets and multiple trusts, trust protectors tend to be professionals, such as accountants or investment professionals or attorneys.

Naming a Trust Protector

All you need to have a trust protector is to name one in your estate plan documents. You also will need to specifically state what the powers of the trust protector will be. If the trust protectors’ obligations are complex and detailed, with the risk of liability, he or she may want to have an attorney to assist him or her in their duties.

Does your estate plan need a trust protector? Call the West Palm Beach estate planning lawyers at The Law Offices of Larry E. Bray today for help drafting your important estate planning documents.

Source:

floridabar.org/the-florida-bar-journal/trust-protectors-under-current-florida-law-a-passing-trend-or-valuable-planning-tool/