You probably remember the cast of characters in your estate plan.
● You were the creator of your trust, known as the grantor, settlor, or trustmaker.
● The trustee controls the assets in the trust. For most revocable trusts, that’s also you, while you’re alive and well.
● The beneficiaries are the people entitled to the economic benefit of the trust. For most revocable trusts, that’s you while you’re alive and then later becomes your children or a charity.
In many situations, this lineup is adequate for achieving your goals. While you’re alive and well, you (as the grantor) are able to make changes to the trust based on the needs of your family or changes in the law.
But what happens after you’re gone or are no longer well enough to keep your trust up-to-date? In most cases a trustee is limited in the changes they can make. Depending on what happens in the future, this can result in conflict, unnecessary costs, unnecessary taxes, or even loss of your family’s legacy.
Amazingly, a simple failsafe mechanism can be added to your trust to shield it from many kinds of mayhem and provide flexibility to your family for years to come.
A Trust Protector is another member of the estate planning “cast” that you must consider adding to your trust. Their primary duty is to oversee the trust and make sure your intentions are carried out, even when an unforeseen change in the law or other challenge occurs. They can also be given other duties, specific to your needs, your trust, and your beneficiaries.
Trusts have a lot in common with Swiss army knives. Their utility is amazingly diverse. When drafted effectively, a trust can preserve your wealth, create structure for the next generation, limit tax consequences, support your business, fund a beloved charity, and give you peace of mind. And, when you include a trust protector, you ensure that your Swiss army knife remains in good working order.