Setting up a trust may benefit your family by bypassing probate, plus you may exert greater control over how your relatives spend an inheritance. However, you still have to place a great deal of power in a trustee. If your trustee is trustworthy and competent, you should not have a problem. Still, you might consider appointing a trust protector.
According to the American Bar Association, a trust protector is someone who guards your wishes when it comes to your trust.
The general duty of a trust protector
The typical purpose of a trust protector is to supervise the actions of a trustee to ensure that the trustee performs the duties laid out in the trust document and that the trust fulfills its purpose. Basically, appointing a trust protector establishes a system of checks and balances. If the trustee strays from the duties of your trust, your trust protector has the power to intervene, possibly by removing and replacing the trustee.
Defining the powers of a trust protector
As a trust creator, you define the powers of a trust protector in your trust documents. You can give your protector broad or limited powers, though you must keep them separate from the trustee’s powers. In addition to removing and replacing a trustee, you may give your protector the power to change the trust to reflect current tax and estate laws. You might also allow your protector to change beneficiaries as you wish.
Additionally, you may want your trust to continue after your death, perhaps as an irrevocable trust. However, it is very difficult to alter an irrevocable trust after it becomes one. You may give your trust protector power to change the trust even if it turns into an irrevocable trust.
The evolving role of a trust protector
Keep in mind that a trust protector is a recent concept and is a currently evolving role in estate law. The passage of time may better define what trust protectors are and what they can do, so take some time to study up about how a trust protector may protect your interests.