When to Hire a Trust Protector

A trust protector is an individual who is responsible for overseeing a trust and its trustees. The concept of the trust protector originated among settlors (individuals who create or establish trusts) who had trusts in offshore jurisdictions. However, trust protectors are becoming more popular as a means of safeguarding trusts established in the United States.

Trust protectors are appointed and granted powers in the trust document. There is no “one-size-fits-all” list of powers a trust protector should be given. A settlor must determine an appropriate level of authority given the settlor’s unique needs. Some examples of duties that a trust protector may perform include:

• removing or replacing a trustee,
• handling disputes between trustees and/or beneficiaries,
• amending the trust,
• adjusting disbursements according to changes in beneficiaries’ circumstances, and
• oversight of investment of the trust’s assets.

There are a variety of reasons for appointing a trust protector. A settlor may have concerns about a trustee’s ability to execute the settlor’s wishes. Or a settlor may want to split administration duties between a trustee and a trust protector. Appointing a trust protector also makes a long-term trust more flexible and able to adjust to unexpected events.

Although anyone may serve as a trust protector, it is generally a good idea to hire an independent third party or professional as your trust protector. An experienced elder law and estate planning attorney can help ensure that a trust protector is given the right balance of power to oversee your trust effectively.

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