COVID-19 Update: You can do Your Planning From Home
The Wall Street Journal
The New York Times
Time
Better Homes and Gardens
Working Mother
Fox Business
Boulder Daily Camera

Structuring Trust Protector Provisions: Protectors' Powers and Duties, Trustee Oversight, Tax and Fiduciary Risks

Continuing Legal Education for Attorneys Presented by Strafford Publications, Inc. (July 2022)

Description:

Estate planners and trust counsel are increasingly using trust protector provisions in trust documents to preserve the intent of the maker of the trust and resolve disputes between trustees and/or beneficiaries. Trust protector provisions are especially useful in trusts with longer terms.

However, there are variances among states as to the treatment of trust protectors. Estate planning counsel must be aware of tax and fiduciary risks in drafting the provisions to avoid costly consequences.

Trust protectors must oversee the operation of the trust and the actions of the trustees. In some jurisdictions, trust protectors can modify trusts, make elective distributions, change the trust's situs, and replace the trustee. While no state law defines a trust protector's powers, there are restrictions and consequences if the powers are not properly structured.

Estate planning counsel must use caution in drafting trust agreements, identifying the trust protector's powers, and designating the extent to which a trust protector serves as a fiduciary.

Listen as our panel of trust and estate planning attorneys provides thorough guidance for structuring trust protectors or directing party provisions in estate plans.

Outline:

  • Trust protector powers related to oversight of a trustee
  • Powers that may be granted to trust protectors related to operation or modification of trust terms
  • Determining whether a trust protector is a fiduciary
  • Trust protector powers that may cause gift or income tax inclusion or loss of GST exemption
  • Drafting effective trust protector provisions to avoid disputes

Benefits:

The panel will review these and other relevant topics:

  • Uniform Trust Code's position that a trust protector is a fiduciary unless the trust document specifies differently
  • The Uniform Directed Trust Act's position that a trust protector is subject to the same fiduciary duty as a trustee in the same position
  • What trust protector duties or actions can result in gift or income tax consequences?
  • What are the risks of using trust protectors to either the trust or the beneficiaries?
  • What powers may a trust document grant a trust protector, both in terms of overseeing the trustee's actions and modifying the terms of the trust?
  • Best practices and key trust provisions to avoid unintended consequences
Client Reviews
★★★★★
When my husband died, I felt I needed to honor him for his children and friends. Working through the plans was healthy because I've been a planner professionally. My daughter is not a planner and I know she would not find those endless tasks therapeutic like I did. So I've created a very specific estate plan with Diedre Braverman's counsel, detailed guidance, and support. Now I feel relief knowing that my death will not derail my daughter's life. Barbara Joan Martin
★★★★★
I really appreciate your calming nature. You are incredibly helpful and kind. After speaking with me it was the first time in a long while where I was able to sleep through the night because of your reassurance. Trudy Moore
★★★★★
I trust Bennett and feel his depth of knowledge. The time and energy Bennett spent briefing the beneficiaries of our plan – helping them to know what to expect and what their duties and responsibilities would be – was invaluable. I trust Bennett and feel his depth of knowledge will allow him to serve a wide range of client needs. The ramifications of each decision were fully explained and his adaptation to our family’s needs was exceptional. Anonymous
★★★★★
Diedre took the time to go beyond our initial assumptions and explained how we can benefit from strategies no one had explained to us before. Kathy
★★★★★
Bennett Braverman is a thorough, knowledgeable expert in his field. He did an excellent job in walking us through the Living Trust process, coaching us through decisions, and making sure we completely understood the what we had to do and the associated benefits and risks. We will continue to recommend him to our friends and look forward to partnering with Bennett in the future. Lisa
Justia Lawyer Rating
Super Lawyers
Colorado Bar Association
Wealth Counsel
Avvo
Avvo
NAELA
SCInstitute
Boulder County Bar Association