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Wednesday, May 18, 2016

How Including a Trust Protector Can Help You Achieve Your Estate Planning Goals

Summary: Careful estate planning is about crafting a plan that can withstand any of a number of possible contingencies. One way to gain an extra layer of protection that ensures that your plan will carry out your goals is by using a trust protector. Your trust protector can make sure that, even if a trustee ceases carrying out his/her responsibilities as you had instructed, your plan can still handle it and ensure that your objectives will be accomplished. 

A trust, or trusts, can represent a very important of a complete estate plan for many folks. Depending on what types of trusts are included in your estate plan, they may help you avoid the expense and delays associated with some types of probate administration, save on taxes or help you protect a loved one with potential money management or legal liability issues. In order for a trust to accomplish what it's designed to do, it must have a competent and reliable trustee managing it. While any trust grantor doubtlessly plans carefully in selecting a trustee or trustee, no process is foolproof. One way to give yourself and your beneficiaries a little extra peace of mind is with the use of a trust protector.





A trust protector is a person you name in your trust. Generally, there are a few reasons why you might want to name a protector in your trust. One is to have an extra responsible person watching over the trustee to ensure that he/she is doing his/her job properly. Your protector can also provide guidance regarding distributions or investment choices. Additionally, your protector may be able to make changes to your trust in certain narrow situations such as changes to the laws in your state. Utilizing a trust protector can be especially helpful if your estate plan includes a specialized trusts. If your plan includes a special needs trust, adding a trust protector can be particularly beneficial.



In some trusts, the protector has exactly one job and one power: to identify when the trustee has ceased carrying out his/her duties in a proper fashion, and to terminate him/her as a result. Depending on how your trust is constructed, and the laws in your state, you may be able to empower your trust protector to name a new trustee to replace the terminated one. If you prefer, you can restrict the protector's powers to terminating a trustee only, and leaving the replacement of that trustee to the succession language you placed in your trust agreement document.



The trust protector language in your trust should be carefully constructed, just like the trustee language of your trust. The recitation of the powers you are giving your protector should be very specific, so that your protector knows exactly what he/she is being asked to do. Additionally, much like how a trust should include several successor trustees who would serve in the event of a preceding trustee's death, resignation or other inability to serve, your trust should also name several successor protectors who will take over in the event of a predecessor's inability to continue serving.