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Valentine’s Day is just a few days away and I’m excited to go to dinner with my husband. We have been married for 14 years and together for 17 years this year. I included a photo from our wedding so you can see how young, rested, and thin we were before kids 🙂

In the last few weeks, many clients have had questions about Trust Protectors. Many of my trust include Trust Protector provisions. What does it mean and who is the Trust Protector – please read the article below to find out and learn more.

What Is a Trust Protector?

Traditionally, the three roles that must be filled when setting up a trust are the settlor (also called a grantor, trustor, or trustmaker), the trustee, and the beneficiary. All three roles are necessary to create a trust that functions properly. Although it is relatively common to use trust protectors in foreign asset protection trusts, a trust protector is a fairly new role in trusts drafted in the United States for estate planning purposes. However, as the number of trusts designed to last for generations grows, estate plans need more built-in flexibility. Putting trust protector provisions in a trust ensures that your intentions for creating the trust are fulfilled despite changing law or circumstances.
How Is a Trust Protector Selected?

A settlor may select as a trust protector any individual or group of individuals, such as family members, business associates, friends, attorneys, accountants, or other professional advisors. The naming of a trust protector may be specific, such as “my neighbor John Doe,” or general, such as “a CPA selected by the majority of the owners of the [ABC CPA Firm].” The settlor provides for and selects a trust protector in the trust agreement. 

In most of my trusts at Varela Law, I draft and review with clients that if a trust protector is needed (for example, because everyone named as a possible trustee has passed away) then the court can name a trustor protector. 
Who Makes a Good Trust Protector?

Because of the many and varied powers that a trust protector can hold, you should name a trust protector who has attributes, knowledge, or skills suitable for the responsibilities of the role. 

At Varela Law, most of the trusts say the court can appoint a trust protector and it must be a professional or corporate trustee or fiduciary. 
Reasons for Including a Trust Protector in Your Trust-Based Estate Plan

There are several reasons to include a trust protector in your trust-based estate plan:

  • Trust protectors offer increased flexibility and peace of mind. The administration of a perpetual trust that may last for generations can be a daunting task because no one knows what the future may hold. Including trust protector provisions in your trust agreement can ensure that your trust achieves your goals despite changing circumstances and laws.
  • Trust protectors can provide additional oversight and support for a trustee. A trust protector can ensure that a trustee is properly administering the trust and carrying out the trust’s purposes. If needed, a trust protector can also help a trustee correctly interpret trust provisions and address changes in the law or beneficiary circumstances. 

Does Every State Allow Trust Protectors?

State law varies in its treatment and classification of, and guidance for, trust protectors. Though many states have adopted a uniform set of laws governing trust protectors, or a modified version of these uniform laws, other states have not addressed trust protectors at all. It is important to consult an attorney familiar with your state’s laws to understand whether trust protector provisions are right for you and your goals. Thankfully, California law does allow for trust protector provisions. 
Please contact us at 714-451-5766  to learn more about naming a trust protector and discuss whether it is a good idea for you. We are happy to answer any questions you may have and help you craft an estate plan that is perfect for you and for your loved ones.