What is a Trust Protector?

What is a Trust Protector

A trust protector is a relatively new role in the trust industry, which makes defining exactly what a trust protector is a bit arduous. Trusts have become an increasingly common way for people to pass their estates to their heirs. With the rise in the use of trusts, a role has been developed alongside the practice known as a trust protector. This person oversees the trustee’s work and seeks to encourage the trustee to implement policies and ideas that best align with the grantor and their vision for the trust.

Trust protectors allow a trustee to carry on with their role without worrying about possible changes that need to be made to reflect the grantor’s wishes best. This unique role is important for the overall well-being of the trust; however, the same role is often a topic of debate within the legal community because it is not clearly defined within state law or federally. This means that role is left open to interpretation and left to the person drafting the instrument.

This article will answer what is a trust protector and outline the roles and responsibilities, as well as the controversies that affect trust protectors.

Revocable Trusts v. Irrevocable Trusts

Before beginning this discussion, it is important to understand the difference between a revocable trust and an irrevocable trust, as the distinction defines when a trust may need a trust protector. A trust is a situation where one person, the trustee, holds legal title to the assets of another, the grantor or settlor, for the benefit of a third party, a beneficiary. This situation gives power to the trustee and can give power to others as a result of the trust agreement. The type of trust will be outlined in the trust document.

A revocable trust is a trust where the owner or settlor may make changes as they see fit and add or remove beneficiaries or assets as they see fit. However, most of the time, these trusts are not shielded from creditors, so they do not provide the same asset protection as other trusts may. A revocable trust is often called a living trust because an important distinction between a revocable and irrevocable trust is that once the owner dies, the trust will be irrevocable, meaning that it can no longer be changed. This living trust allows freedom at the moment, but it can cause issues once it is irrevocable, especially if the trust became irrevocable during the process of change.

Irrevocable trusts are not able to be changed once they are created. This means that even the settlor cannot change the terms of the trust except in very limited circumstances. They must relinquish control of the trust when they create it. This allows what is in the trust to pass to a beneficiary without having to pay estate tax. A living or revocable trust will become an irrevocable trust once the grantor passes away. Irrevocable trusts work for asset protection purposes and have several other benefits both during the life of the settlor and after, but they are significantly less flexible than a revocable trust during the life of the grantor. For this reason, a trust protector may be needed.

Defining Trust Protectors

Because there are no laws that directly outline the trust protector’s role, it can be difficult to define “trust protector” effectively. However, drawing from the various uses and responsibilities that they maintain, a trust protector is an appointed person that holds special, named duties under the trust. The person is named in the governing instrument and is usually an attorney. They cannot be related to the settlor for tax reasons as defined in estate tax law. The power granted is often specifically outlined within the same instrument. They are responsible for ensuring that the trust benefits the beneficiaries as the grantor would have wanted. A beneficiary is a person or people that the settlor wants to receive the benefit of the trust. They are often family but can be anyone that the grantor would like to benefit.

This role and duty is separate from a trustee or a trust advisor and functions squarely within the powers granted in the trust document. Comparing this role with both a trustee and a trust advisor can help address the differences and further define the role.

Trust Protector v. Trustees

There is a stark difference between a trust protector and a trustee. Trustees are people appointed to oversee the assets in the trust, and they have a fiduciary duty to the trust beneficiaries. This means that a trustee is responsible for trust administration and can be held liable if they make mistakes that affect the performance of the trust. A trustee must protect the money for the benefit of the beneficiaries and act in their best interests. Trustees are often a person, attorney, or business that specializes in taking care of the trust. There are trust companies that can be hired as well.

Additionally, the trustee has to act based on the trust instrument exactly as it is written. Trust law will often hold trustees liable if they are not following exactly what is written. This is a significant issue in many cases with a long-term trust and the reason many long-term trusts need a trust protector. A trustee is often tied to the language of the governing instrument and is forced to act against what is likely the wishes of the grantor.

A trust protector, on the other hand, exists to help the trustee carry out the interest of the grantor. This means that they can help modify, remove, and replace aspects of the trust if it means that it better conforms to the wishes of the grantor. The trust protector role holds certain powers that help the trustee navigate special assets or changes in family members that are not named in the instrument. Additionally, trust protectors do not have a fiduciary duty to the trust beneficiaries and can perform their actions without begin tied so directly to the governing instrument. However, they are limited to the duties or powers granted specifically in the trust document.

Trust Protector v. Trust Advisor

Another distinction that can help further define what a trust protector is is the difference between a trust protector and a trust advisor. Unlike a trustee or a trust protector, a trust advisor can direct or make decisions on the investment of the assets, direct discretionary distributions, or other roles that place them in a similar situation as a trustee. Under case law, there is often little distinction between a trust protector and an advisor, but the advisor will be handling the trust assets and often holds the same fiduciary duties as the trustee. A trust protector will most commonly be dealing with administrative duties such as removing the named trustee or exercising other power granted to them. Trust protectors operate outside of the fiduciary capacity that the advisors and trustees must operate within.

Estate Planning Attorneys and Drafting the Trust Document

An estate planning attorney has the intense responsibility of drafting the trust instrument and ensuring that all roles and responsibilities are accounted for and protected. The instrument will outline the terms of the trust, appoint trustees, demonstrate how to name a new trustee, name the beneficiary or beneficiaries, and outline the benefits and powers that each role will hold. They will also need to specifically outline any powers that a named trust protector may have and how those will interact with the other roles. The instrument should ensure that both the trustee and the trust protector have sufficient expertise to serve and protect the interests of the settlor.

The Trust Protector’s Role

Because the particular powers given to the trust protector must be outlined under the governing instrument as required by case law and tax laws, the trust document does control the role of the trust protector. However, there are several common ways that the trust protector can serve the beneficiary and use the power given to them for the beneficiary.

Language Changes

Occasionally, there will be language in the trust document that unnecessarily limits the powers of the trustee. The governing instrument can give the trust protector the ability to change this language to best reflect the will of the settlor. Under state law, this cannot significantly impact the control or power of the trustee.


In some cases, the trust assets are not able to generate the income needed by the beneficiary, so the best way to protect the beneficiary and serve the fiduciary duty under the trust is to terminate the trust. The trust protector may be given the power to terminate the trust under specific circumstances. This power will need to be outlined under the trust instrument.

Designating Trustees

A trust agreement may also give the trust protectors the ability to appoint trustees and the power to remove trustees if necessary. By allowing the trust protector these powers, the settlor has the peace of mind that a trust protector can remove a trustee if they are not carrying out their duties correctly and appoint trustees to continue to control the trust and serve the beneficiary. The power to remove is particularly important when the trustee may have an issue carrying out their duty under the law.

Manage Beneficiaries

Trust protectors may also have the power to manage the beneficiary of the trust. This is most common in long-term trusts when the assumed class of beneficiaries has grown since the trust was established but the trust names specific beneficiaries.

For example, say Norma named her friend Julie’s grandkids as her beneficiaries because she never had children of her own and Julie’s grandkids were like her own. When Norma sets up the trust, Julie has three grandchildren, Ann, Barbra, and Cameron, who are named in the trust. However, shortly before Norma passes away, Julie’s family welcomes a fourth grandchild, Daniel. Daniel is not named in the trust, but everyone assumes that Norma would have wanted Daniel to be included. A trustee cannot include Daniel because the language of the trust specifically excludes him. A trust protector can be given the power to add Daniel as a beneficiary and ensure that he is taken care of as well.

Adjust Distributions of Trust Assets

Additionally, a trust protector can be given the power to adjust the distribution of assets to the beneficiary based on their lives and needs. This can serve to ensure that each person can receive what they need and keep moving forward with their lives.

The Controversy Surrounding Trust Protectors

There is some controversy surrounding the use of trust protectors, mainly revolving around whether or not the powers given to a trust protector force them to act in a fiduciary capacity without the oversight that a fiduciary capacity should require. The powers, specifically the power to remove a trustee and the power to adjust distributions, are normally handled by another person who carries a fiduciary duty under the trust. The trust protector can make decisions that alter the outcome and administration of the trust without being liable to the trust or working in a fiduciary capacity.

The Uniform Trust Code, which was developed by some of the best minds in estate planning and estate law and serves as a guide for state law. Several states have adopted the Uniform Trust Code into law and use it to determine the powers and fiduciary responsibilities that arise under a trust protector and their relationship to the trust. Under the Uniform Trust Code, a trust protector is likely a co-fiduciary under the trust, especially if they can manipulate or terminate a trust. However, the Uniform Trust Code has not been adopted in all states, and state laws differ on that answer to what is a trust protector and what power they hold.

Even still, it can be helpful to clearly outline and name a trust protector in a trust to ensure that there is someone with the power to continue to serve your wishes and protect your investments after you are no longer able to.

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Emily Holland
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