Who Will Protect Your Living Trust? Trust Protectors.
Why Every Trust Should Have One, but Most Do Not!
At Aanestad Law, we understand one of your primary planning objectives is to protect the value of your estate and also avoid needless expenses and disharmony due to changes in the law and family dynamics. When you create a new trust or restate an existing trust with Aanestad Law, important “Trust Protector” provisions are incorporated into your estate plan. Chances are the term “Trust Protector” may be new to you, but its history dates back more than 300 years to English Common Law. So, what is a “Trust Protector” and why should you want one in your estate plan?
Initially, the Trust Protector was given one single power centuries ago. That being, the power to “fire” a misbehaving successor trustee after incapacity or death of the grantor. The people you nominate today to act as your successor trustee are most likely upstanding family members or close friends. But what if they developed a future drug, alcohol, or gambling addiction, became financially or mentally unstable or experienced diminished mental capacity and were being taken advantage of by another? Absent the Trust Protector provision, the beneficiaries of your estate would be forced into expensive and time consuming court battles, spending their dollars and your dollars to remove this wayward successor trustee.
Over time, powers were added to provide expanded authority for your Trust Protector to address other unknown, current and future tax implications, asset protection problems and “common sense” provisions that any reasonable person (you) would fix — if you were only alive to solve the problem after your death or incapacity. Think of the Trust Protector as a bodyguard to your estate, should you need it upon your incapacity or death. Your Trust Protector could remove and replace a trustee, amend the trust due to changes in the law or tax law without the need to obtain an expensive and time consuming court order, resolve disputes between trustees, change trust provisions due to unanticipated circumstances, veto bad investment decisions and correct ambiguities or errors made upon drafting your trust – to name only a few of these important estate protection provisions.
Essentially, the Trust Protector is a tool to help ensure that the trustor’s intentions are carried out following incapacity or death. While the Trust Protector is relatively new to the West Coast (it has historically been used as an East Coast “old money” multi-generational estate planning strategy), it is one of many benefits available to clients of ours… to ensure that your plan ultimately works how you intend it to.