What Does A Trust Protector Do?

One of the great things about setting up a trust, is the ability to include conditions on who gets the assets of the trust, and when. So, for example, you could leave money to someone only if they graduate college, or money to someone so long as they continue to remain disabled, or money to someone that only gets disbursed on a periodic basis—however, you want to fashion it, a trust allows you to have some control and a trustee to have discretion over when it will disburse money to those who may need or want it.

An Unforeseen Future

But there is one problem or difficulty in creating a  trust that has conditions on it: what if circumstances change, and those circumstances would have altered the conditions you placed on the trust, had you known?

So, for example, imagine you leave money to someone only if and when they graduate college. After you pass, that person is in an accident and is disabled to the point that they cannot finish college. Had you known that was going to happen, you may not have included that condition.

Imagine you left money to someone only to be paid out on a yearly basis. But that person gets laid off from work, and needs money, and had you known that was going to happen, you may have not included such strict time conditions.

Normally court intervention would be necessary to alter the terms of the trust, if a loved one or beneficiary wants a disbursement that goes against the conditions that you left as part of the trust.

But with what is known as a trust protector, you can plan for these contingencies when you create your trust.

Who or What is a Trust Protector?

A trust protector is a person appointed who can allow a trustee to remain consistent with the intentions of the trust, even in the face of unforeseen future events. A trust protector allows the terms of a trust to be modified by the trustee, to accommodate unforeseen events.

It also can avoid court action. Any challenge to a trust, or attempt to override or alter the conditions you imposed on a trust, can result in family members fighting over the property left in the trust. But you can designate a trust protector to interpret the trust, or to act as a mediator in the event of any disputes that may arise over the terms of the trust in the future.

A trust protector can also alter the terms of the trust, in the event that laws change that could affect the trust, its property, or your intentions.

For example, if you set up a trust in a certain way because it has certain tax benefits, and those laws change, the trust protector can alter the terms of the trust, to avoid any tax penalties that may have been incurred because of those law changes.

Do you needs a trust or a trust protector? Let us help you figure that out. Call the Torrance will and estate attorneys at Samuel Ford Law today.

Sources:

americanbar.org/groups/real_property_trust_estate/publications/probate-property-magazine/2017/january_february_2017/2017_aba_rpte_pp_v31_1_article_huber_trust_protectors/

svb.com/private-bank/insights/trust-estate-perspectives/what-are-trust-protectors/