The concept of a Trust Protector was typically found only in domestic and offshore asset protection trusts. However, since trusts are becoming more common as the “go to” estate planning tool, the Trust Protector concept is making its way into even the least complex of estate plans. 
Trusts provide control, privacy, and protection. Throw in the added benefit of potentially saving your loved one’s enormous after-death legal expenses, and trusts are a great primary planning tool for most families. But what happens when after death, or after an irrevocable trust is set up, something doesn’t go quite as planned?
What is a Trust Protector?
In a trust, whether revocable or irrevocable, you have the usual roles:
• The Trust Maker (sometimes called a Grantor or Settlor) is the creator of the trust, (You).
• The Trustee is in charge of following the instructions set forth in the trust. (Generally you, however sometimes a family member, professional Fiduciary, or trust bank)
• The best job belongs to the Beneficiaries because they enjoy all the benefits.
At first, some of you might question the use of a Trust Protector in a revocable trust. After all, if you, the Trust Maker is alive and well, then you can make any changes necessary. However, if you, as the Trust Maker become mentally incapacitated or dies, the trust becomes irrevocable.
At the heart of the concept, the Trust Protector serves to solve several key problems that arise once a trust becomes irrevocable. The last thing that you want is for your trustee(s) to have to go to court to ask a judge to comply, or fix the trust to comply, with the original intent of the Trust Maker; (your wishes). For example, if there is a change of the law, circumstances surrounding the trust may require adjustments.
To keep expenses down and the trust out of court, you, the Trust Maker can name and empower a Trust Protector to solve or adjust the trust based on the following circumstances:
• Remove and replace trustees. We will assist you, the Trust Maker to draft the trust so that the Trust Protector either can, or cannot, remove family members as Trustees. It depends on what powers you want to provide or restrict to the Trust Protector. This is a key issue that needs to be discussed with us, your estate planning attorney.
• Allow the trust to be amended. To comply with changes in the law, a Trust Protector could make changes so that the trust and its beneficiaries do not incur the time and expense of asking a judge to fix the trust.
• Resolve disputes between co-trustees who disagree. For example, if two siblings who are equal trustees cannot agree on an issue, then the Trust Protector can resolve the tie.
• Resolve disagreements between beneficiaries and trustees. In certain cases, the Trust Protector may step in and resolve the dispute.
• Change distributions based on circumstances that may have changed in the lives of the beneficiaries.
• Allow new beneficiaries to be added if there are additional descendants to the trust.
• Remove and replace a corporate trustee. At the request of a beneficiary, the Trust Protector could terminate a non-family member trustee, such as a bank or a trust company.
Overall, the Trust Protector provides an additional safety net to make sure the wishes of the Trust Maker (you) are fulfilled.
Who Can Serve?
Generally, anyone can be appointed as a Trust Protector. Most of the time, a Trust Protector can be an individual, an institution such as a bank, or even a simple corporation or an LLC. Usually, the family lawyer or accountant will be selected. Our firm has served as Trust Protector for many of our clients. In some trusts, if a Trust Protector is needed, the trust provides that the beneficiaries have the power to unanimously name a Trust Protector so that one is not required to be named when it is set up.
The good news is that there is no downside to naming a Trust Protector. It is just an extra layer of protection to help preserve your intentions as the Trust Maker.
We hope this information is useful to you and your families. If you have a specific question, or would like to add a Trust Protector to your estate plan, please don’t hesitate to call our office and schedule an appointment.