Trustee watches over the trust, but who watches the trustee?
One of the most powerful tools available to Florida residents to provide for their loved ones after they are gone is a trust. A person who creates a trust, sometimes known as a settlor or grantor, places assets in the possession of a trustee, who maintains the trust property for the benefit of the beneficiaries long after the grantor is gone. However, a trust can last a very long time. What happens after the trustee is gone?
When the trustee is an individual, that person can die before the trust dissolves and the trust will have to be taken over by a successor trustee. When the trustee is a business, such as a bank, the business can be sold. Beneficiaries sometimes suspect that the new trustee is not managing the trust property well, but removing a trustee typically requires long, stressful and expensive legal action.
In recent years, estate planning law has developed a new role that can help with this problem: the trust protector. A trust protector is someone appointed by the terms of the trust to oversee the trustee. Typically, the trust protector is someone who is not a beneficiary and has no other ties to the trust property, but does have the right to fire the trustee if the trustee isn’t performing its duties.
The trust protector may have other rights and responsibilities as well. The exact role of the protector must be spelled out in the terms of the trust instrument itself, and is subject to state law. Not every state recognizes the concept of a trust protector, and some of those that do recognize it have different ideas about the role.
Because the laws regarding trust protectors are relatively new, one must be careful when choosing to include one in a trust instrument. However, some people find a trust protector a valuable safeguard.
There are many options to consider when planning an estate, whether they involve a trust or not. A Florida attorney with experience in many aspects of estate planning law can help people to understand their options and guide them through the process.
Source: NYTimes.com, “Guardians of Trusts,” John F. Wasik, March 12, 2014