What is a Trust Protector, and Why Does It Matter?

In drafting an estate plan, one tool available to clients is to create a trust. When you decide to create a trust, you essentially set up your assets to be managed by a third party (i.e., the “trustee”). The trustee’s job is to distribute the trust’s assets in a way that aligns with your stated goals. By putting your assets in a trust, you can avoid probate, protect funds from being used for any other purpose besides the one you intend, and avoid certain estate and gift taxes. While many clients assume the trust is only helpful for high-net-worth individuals, it can be a valuable tool no matter the size of your estate.

Many of our clients decide to create a trust as part of their estate plan, understanding its benefits and wanting to use those benefits for their advantage. What many clients don’t know from the get-go, however, is that there are extra layers of protection that could be helpful to add to their trust. One such layer is called the trust protector.

The trust protector is a person or entity that has power over the terms of the trust but that is not the trustee. The trust protector is always someone without any interest in the assets involved, meaning the trust protector does not stand to benefit from receiving any of the trust’s funds. Many times, individuals choose a law firm to act as their trust protector. The trust protector should be explicitly named in the trust’s documents so that there is no confusion about who is taking on the role.

Benefits of Naming a Trust Protector

Why name a trust protector when there is already a trustee? The trust protector takes on important roles such as reviewing the trustee’s actions, addressing any possible conflict during the trust administration, and adjusting the trust’s language if there are new laws that necessitate a change. Under limited circumstances, the trust protector can also terminate the trust if termination is in the best interests of the beneficiaries. Termination would generally only happen if there were a significant change in the legal landscape that drastically alters the trust’s ability to function.

In short, while the trustee is in charge of trust administration, the trust protector is in charge of overseeing the trustee’s process to make sure everything goes smoothly. The trust protector is a supervisor, a director, a mediator, and an advisor to all those involved in the trust’s administration.

Any trust protector should both understand the legal landscape around trusts in general and should be intimately acquainted with the specific goals of the trust they are protecting. The trust protector can, if necessary, remove a trustee if the protector finds that the trustee has not been abiding by the terms of the trust. The protector can also step in if there are legal questions about how to abide by some of the trust’s terms.

For those creating a trust as part of an estate plan, naming a trust protector can also provide peace of mind. When you die, the terms of your estate plan will be left to those you have entrusted with the distribution of your assets. By adding an extra layer of protection to your trust in the form of a trust protector, you can rest easy, knowing your wishes will be respected and your beneficiaries will receive the assets you left for them as efficiently as possible.

Choosing a Trust Protector

The most obvious choice for a trust protector is the law firm that helped create the trust in the first place. This way, the attorneys are familiar with the trust itself and have an established relationship with the involved parties.

The trust protector is almost always an attorney or a law firm, and it should be an attorney you know will act diligently, honestly, and professionally to ensure that the trust’s terms are being followed.

In naming a trust protector, ask the law firm you are considering whether they have served in this capacity in the past. Looking at a firm’s experience and track record can be the best way to see if that firm will be able to do the job well.

Ultimately, though, choosing a trust protector is just one piece of the larger puzzle. Estate planning can be an involved process. It includes gathering documents, talking through goals, choosing a strategy, and implementing that strategy to align with your priorities. While this can feel overwhelming, it is important to consider each step thoughtfully and ensure that the assets you have worked so hard to earn will be left in good hands. We tell our clients time and time again: choosing the right Boulder estate planning attorney can make all of the difference. By retaining a team of trusted, experienced attorneys, you can be sure that the details and nuances of your estate plan are in the best of hands.

Speak With a Boulder Estate Planning Attorney Today

If you have questions trusts, trust protectors, or estate plans in general, give us a call at the Braverman Law Group today. We believe that informed choices help clients have peace of mind, and we are experts in customizing each client’s estate plan to their unique needs and goals. Making decisions about how to draft your estate plan can be difficult, but with the right team of attorneys by your side, you can be sure you are making choices that are appropriate for you and your loved ones. Our team of Boulder estate planning attorneys has years of experience in the field, and we are proud to offer empathetic, holistic representation for those seeking our services. For a free, no-obligation consultation with a Boulder estate planning attorney that has your best interest in mind, give our office a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have a member of our team reach back out to you as soon as possible. Our firm covers estate planning, trust administration, special needs planning, Medicaid planning, and more.