What is a Trust Protector?

Q: What is a Trust Protector?

A: A Trust Protector is a disinterested individual named in your trust who has the power to amend the trust if necessary.

If you have a Revocable Trust, you have complete control while you are living. You can alter the terms, change the trustees and beneficiaries, and even terminate the trust altogether. However, upon your death a Revocable Trust becomes irrevocable, meaning it cannot be further changed or modified. Problems could arise if you missed the opportunity to make an important modification to your trust. For example, if one of your children had a child shortly before your death before you had the chance to provide for them in your trust. Or one of your beneficiaries is facing bankruptcy, leaving their inheritance vulnerable to their creditors.

It is in these situations where the Trust Protector would step in. A Trust Protector has to be an independent third party and cannot be related or subordinate to you or any trust beneficiaries. The Trust Protector could then modify the trust when your beneficiaries experience major life changes so that the trust more fully complies with your intent. Additionally, changes in the tax or trust laws might arise—the Trust Protector would be able to amend the trust to adapt to these legal changes.

Another important role of the Trust Protector is Trustee oversight. The Trust Protector can approve or veto the Trustee’s investment decisions, review discretionary distributions made by the Trustee, resolve possible disputes between the Trustee and beneficiaries, and if necessary, remove the Trustee and appoint a successor Trustee. The powers of a Trust Protector can be tailored to your situation.

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While a Trust Protector provides greater flexibility in the administration of your trust, it is not always advisable to have one. After all, the Trust Protector wields considerable authority, and the role has to be filled by a non-family member. This opens the door to the possibility of the Trust Protector making changes after your death that you wouldn’t have ever wanted. There are also additional costs to consider since the Trust Protector is entitled to compensation. Consequently, it is important to consult an experienced trusts and estates attorney who can guide you on the costs and benefits of incorporating a Trust Protector into your trust.

Brittni Sullivan, Esq. and Dylan Stevens, Esq. are attorneys at Burner Law Group, P.C. focusing their practice areas on Estate Planning and Elder Law. Burner Law Group P.C. serves clients from Manhattan to the east end of Long Island with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.