Many individuals choose to use a trust as part of their estate plan. Trusts are flexible and provide many important benefits. However, one thing that you can always be certain of is change.
Over time, family situations, laws, and financial markets are almost certain to change. Although not required, a trust protector is a great way to ensure that necessary adjustments are made to your trust as these changes occur. Keep reading below to learn more about the role of a trust protector.
What Does a Trust Protector Do?
If you are considering a trust, you likely already know about the role of a trustee. The trustee oversees and manages the assets in the trust and makes distributions according to the terms of the trust. However, the trust protector is a totally separate role.
A trust protector has the authority to make changes to the trust when necessary. The trust protector does not oversee the daily management or distribution of the assets. Instead, the trust protector has special authority to:
- Modify the terms of the trust
- Replace trustees when necessary
- Adapt the trust to changing laws
- Alter beneficiaries
- Move the trust to a different jurisdiction
The specific powers of the trust protector depend on what is outlined in the original trust documents as well as Oklahoma trust law. This is why having an estate planning attorney in Oklahoma City who is well versed in trust law on your side during the creation of your trust is crucial.
When Would You Need a Trust Protector?
Not every trust needs a trust protector. Trust protectors can be expensive because you typically hire an independent third-party to perform that function, so you must carefully weigh whether or not you really need a trust protector. For short-term trusts that distribute assets outright, you likely do not need a trust protector.
Additionally, for trusts that have a smaller value, the cost of a trust protector might outweigh the benefits they could provide. Keep in mind that most trust protectors are paid, and their fees are usually not cheap. However, long-term trusts that require on-going management may very well need a trust protector.
Over time, laws change and so do family and financial situations. This is when a trust protector can be extremely valuable to ensure that your trust remains updated with the changing situations.
Who Should Serve as a Trust Protector?
The person you select as your trust protector should have no interest in the trust itself. This could create a conflict of interest that might lead to disputes and other issues. So, you should avoid selecting family members or others whose opinion might be biased. Instead, choose:
- An experienced trust attorney
- A certified public accountant who is familiar with tax planning
- A professional trust company
- A professional financial advisor
You want to select someone who has experience managing the types of assets that are inside your trust. And, you want someone who will act solely in the best interest of the trust. Contact Helton Law Firm today to let us help you choose the right trust protector for your needs.