6 WAYS A TRUST PROTECTOR CAN HELP YOU
Trust protectors have been regularly used for high-end trusts in offshore accounts and are becoming more common. Essentially, a trust protector is someone who serves as an appointed authority over a trust that will be in effect for a long period of time. Trust protectors oversee the assets and generally have greater power over the trustee(s). Sometimes, they have the power to amend or terminate the trust. Significantly, the trust protector has the power to act without going to court—a key benefit that saves time and money and honors family privacy. Trust protectors ensure that trustees maintain integrity, make solid distribution and investment decisions, and adapt the trust to changes in the law and circumstance.
Should You Appoint a Trust Protector?
Not every trust needs a trust protector, but it can be beneficial in many circumstances, including:
Trusts that have more than one trustee
The key to making a trust protector work for you is to be very specific about the powers available to that person. It is important to authorize that person, and any future trust protectors, to fulfill their duty to carry out your intent—not their own.
You can appoint anyone you would like to protect your trust, including:
Someone who is close to your family
A Certified Public Accountant (CPA)
An attorney
A Corporate Entity or Bank
A Certified Financial Planner (CFP)
Whoever you chose, make sure you first have a conversation with them about your expectations and their duties as trust protector.
6 Ways a Trust Protector Can Help You
Your trust protector may take the following actions:
Remove or replace a trustee who is not performing their duties appropriately or is no longer able or willing to serve
Amend the trust to reflect changes in the law
Resolve conflicts between beneficiaries and trustees or between multiple trustees
Modify distributions from the trust in response to changes in beneficiaries’ lives (ex: premature death, divorce, drug addiction, disability, or lawsuits)
Allow new beneficiaries to be added when new descendants are born
Veto investment decisions that might be unwise
Can You Benefit from a Trust Protector?
Generally speaking, most people can. Trust protectors provide flexibility and an extra layer of protection for your intent, as well as for the trust’s accounts and property and its beneficiaries. Trust protector provisions can easily be added to a new trust, and older trusts may be changed to add a trust protector. If you have created a trust or are a beneficiary of a trust that feels outdated, we can help you. Call our office at 614-389-9711 today to easily update your old trust or create a new one.
About the Author - Gregory S. DuPont, JD, CFP
Greg has been serving clients as an estate and tax planning attorney in Ohio since graduating from Capital University Law School in 1992. He obtained an accounting and finance degree from The Ohio State University. As a Certified Financial Planner, a designation that requires advanced coursework in a complete range of financial subjects, he is a rare financial professional who can provide cross-disciplinary solutions from the legal, tax and investment perspectives.
Greg is the co-author of the book: Protecting Your Future with Tax-Free Long-Term Care, and is a contributing author in Jack Canfield's best selling book The Recipe for Success.
He has been named one of Ohio's Top 100 lawyers, an invitation-only designation given by The National Advocates.