Trust Protector: Ensuring the Integrity of Trusts in Estate Planning

 

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Understanding the Role of a Trust Protector in Estate Planning

Explore how a Trust Protector can enhance your estate planning strategy. Learn the benefits, responsibilities, and legal implications with Perigon Legal Services.

Author: Stan Faulkner, Founder, Perigon Legal Services, LLC

Mr. Faulkner is an experienced counselor and litigator with 15 years of experience, having held bar licenses in four states (Mo, Il, Ct and Ga). Stan Faulkner uses this experience and focuses his skills in the pursuit of assisting individuals in probate (trust and estate) matters, guardianships and conservatorships, estate planning, business disputes and contract disputes. Published on June 30, 2024.

A trust protector oversees a trust, guiding it through unexpected changes and legal challenges. This role adds an extra layer of security and flexibility, enhancing the protection provided by the original trustee. Their defined roles and powers are crafted within the trust document, establishing a proactive approach to trust administration and governance.

Trust protectors may have duties that can significantly change a trust administration, such as the ability to replace trustees or amend trust terms to better reflect current laws and conditions. Join us as we explore the trust protector’s role in estate planning. We aim to clarify their specific powers and growing importance in Georgia estate planning. By examining this role closely, we explain why trust protectors are becoming more common and what it means for strategic estate planning.

Who Is a Trust Protector?

Trust protectors are a relatively modern addition to the landscape of estate planning. Assigned by the trust document, their purpose is to oversee and provide an extra layer of security for the trust’s operation. Trust protectors wield significant powers over various aspects of a trust. Their authority can range from altering the terms of the trust to appointing or even removing trustees, ensuring the trust remains relevant for beneficiaries as circumstances change.

The Uniform Trust Code (Section 808) generally considers trust protectors to have fiduciary duties. This implies that their actions must prioritize the beneficiaries’ interests and be in accordance with the trust’s purposes. However, the extent of fiduciary duty can vary based on the terms set out in the trust instrument and state law.

Unlike trustees, who manage the trust’s day-to-day activities, trust protectors typically focus on broader oversight, stepping in when necessary to guide the trust’s direction. They enforce the trust’s integrity and ensure its purpose is sustained throughout its duration. Including a trust protector enables the trust to adapt to legal changes or unforeseen circumstances without the need for court modification. They provide a check on the trustees, safeguarding against mismanagement or negligence.

Roles and Responsibilities of a Trust Protector

Some of the core duties and powers granted to a trust protector include:

  • Power to Amend: They hold the ability to make adjustments to the trust, thereby keeping it relevant and effective.
  • Choosing Trustees: The power to appoint or remove trustees ensures strong governance and adaptability.
  • Response to Change: With the authority to modify the trust’s provisions, they can adeptly navigate shifts in laws or family dynamics.
  • Approving Trustee Actions: Giving consent for major trustee decisions.
  • Resolving Disputes: Mediating conflicts between trustees and beneficiaries.

These responsibilities are not just a checklist; they are a proactive way to manage trusts. We design our trusts with these protective measures in place, understanding that life constantly changes. 

Legal Basis and Regulation in Georgia

In Georgia, trust protectors are appointed to oversee and ensure that a trust operates according to the settlor’s intentions. Their regulatory framework is defined by the Official Code of Georgia Annotated (O.C.G.A.), reinforcing the significance of the trust protectors’ responsibilities and authorities. The Georgia Administrative Code is another critical resource, providing further details and procedural guidance applicable to trusts and estate plans. 

It is essential to align with the standards and practices outlined in the state regulations to ensure compliance and preserve the intended benefits of a trust. Particularly for trusts intended to have a lasting impact, such as irrevocable trusts in Georgia, the intervention of a trust protector may prove invaluable. Once established, an irrevocable trust is not easily altered unless under very limited circumstances. Understanding how a trust protector enhances such instruments is pivotal to your estate planning strategies. 

Our role is to monitor trust activity, address legal complexities, and offer corrective measures when necessary.

Benefits of Having a Trust Protector

Trust protectors offer guidance, ensuring your trust remains on course to fulfill its purpose. Let’s discuss some benefits of having a trust protector in Georgia.

  • Adapting to Change: Unexpected reforms of tax laws can threaten a trust’s efficacy. However, a trust protector provides an extra layer of security, ensuring that the trust adapts to legal and tax changes. Introducing a trust protector involves customizing your trust to emerging regulations and preserving its value and purpose.
  • Guard Against Mismanagement: Sometimes, even the most scrupulous trustees can stumble. In the event of trustee mismanagement, a trust protector acts as a safeguard, ensuring asset protection.
  • Preventing Conflicts: A trust protector can identify and prevent potential conflicts before they disrupt the peace.
  • Intervening When Necessary: The trust protector can step in to resolve disputes, ensuring fair play and maintaining the integrity of the trust. 

Choosing the Right Trust Protector

Some qualities you should consider when looking for a trust protector include:

  • Sufficient expertise in trust law
  • Unbiased judgment
  • A deep understanding of the trust’s goals
  • The ability to act in the best interest of the beneficiaries

Incorporating a Trust Protector in Your Estate Plan

Incorporating trust protector provisions in your estate plan can be a wise move, fostering resilience and stability within your trust. Through enhanced flexibility, increased protection from mismanagement, and the assurance that your trust stays current with legal changes, a trust protector becomes an indispensable ally in your estate planning journey.

Steps to Appoint a Trust Protector

When appointing a trust protector, you should consider the following:

  • Identify the Ideal Candidate: Consider someone impartial with a deep understanding of your intentions for the estate.
  • Determine Their Powers: Clearly outline what the trust protector can and cannot do within the trust’s documentation.
  • Legal Documentation: Amend or establish your living trust with a qualified attorney to include the role of the trust protector.

A trust protector’s involvement can further secure your trust assets against unforeseen challenges, making your estate plan a more formidable shield for your legacy. 

Contact Perigon Legal Services for Personalized Advice

 

In the constantly evolving landscape of estate law, a trust protector can serve a pivotal role in your estate plan by providing an essential layer of oversight and adaptability to your estate planning strategy. They have the authority to ensure that the trust operates as intended, adapts to legal changes, and addresses unforeseen circumstances. It’s prudent to discuss such a significant inclusion with knowledgeable professionals.

Perigon Legal Services is a law firm focused on estate planning, with a primary dedication to addressing the intricacies of personal and family legacies. We are situated in Atlanta, GA, and are well-equipped to provide the insight and guidance needed to understand the role of a trust protector in your estate plan.

Contact us today for personalized advice. Together, we can navigate the complexities of estate planning and ensure that your decisions are aligned with your aspirations and values for the future.

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