What is a Trust Protector and When Should They Be Used?
Would you please explain the role of a Trust Protector and when they should be utilized? Thank you very much. PS: I found your book to very informative.
Thank you for your comment about my book. I also have a new one out now just focused on trusts: The Baby Boomers Guide to Trusts: Your All-Purpose Estate Planning Tool.
The trust protector role is designed to safeguard an irrevocable trust and to make changes to it as circumstances change. The grantor of a revocable trust can always do this himself or herself, but must give up many powers for an irrevocable trust to achieve its goals. Further, revocable trusts become irrevocable upon the death of the grantor.
Trust protectors generally are given roles or powers with respect to the trust that may be granted to others, such as the grantor or grantors themselves or various beneficiaries. These generally include the power to amend the trust, change trustees, and review trust accounts. Often grantors retain some of these powers themselves, but if the trust is to continue after the trustee’s death or incapacity, then the powers must be given to someone else.
The formal role of trust protector took root with the creation of irrevocable trusts used for asset protection purposes in which the grantor must give up all control. By appointing a person to the role of trust protector they could have someone they trust step in as necessary to change trustees or even the terms of the trust. Trust protectors are also often used in special needs trusts where the powers should not be given to the beneficiary due to their likely incapacity or the rules of government benefit programs.