Is Your Trust Protected By Superman?

You may not need a superhero to watch over your trust but you should be aware of the next best thing – the Trust Protector. Trust protector

The revocable living trust (a “RLT”) is an excellent estate planning tool used to avoid the costs and delays of probate.  The person who creates the RLT is called the “grantor” or “trustor”.  The trust document nominates a trustee who has the responsibility of managing the assets in the RLT for the benefit of the beneficiaries.
In the most common scenario, you and your spouse create a trust which both of you control as the trustees.  If one of the trustors subsequently dies or is incapacitated, the other spouse will serve as the sole trustee.

What happens when the trustor can no longer serve as trustee?

There are a number of circumstances when you may no longer be able to serve as trustee of your Trust.  For example, if you were incapacitated due to an accident, a stroke or some other illness.  The Trust document should nominate someone, known as a “successor trustee,” to assume the role in this situation.

Absence of checks and balances. 

After your passing or incapacity, a successor trustee must step in to administer the trust according to its terms.  The successor trustee has the fiduciary duty to administer the Trust for your benefit; however, what happens if the successor trustee is not acting in your best interests?  For example, you designate Daughter A to serve as your successor trustee for your revocable living trust and she assumes this role after your passing.
The beneficiaries of your Trust upon your passing are Daughter A and Daughter B.  Daughter B has concerns that her sister is not using the Trust for your benefit and may even be siphoning money off for her own personal debts.  At that point, Daughter B may resort to filing a petition with the District Court to review the conduct.  However, this can be a time-consuming and expensive process and may not occur if Daughter B can’t afford the assistance of an attorney.

The solution may be the Trust Protector.

A Trust Protector is a disinterested person, entity, or committee, named within a trust, to exercise certain power over the terms of a trust but who is not the trustee.  The Trust Protector can be an advisor to the administration of a trust and to supervise the trustee.  The duties of the Trust Protector are those which are set forth in the terms of the Trust.

For example, the Trust Protector can be authorized to modify terms of the trust in response to changes in tax laws, creditor protection laws, or other changes to laws applicable to the trust; monitor the trustee’s actions to protect the beneficiaries; remove or appoint trustees. Mediate disputes between trust parties; or resolve an impasse between co-trustees.

Who should you select as the Trust Protector?

The Trust Protector doesn’t need to be an attorney.  However, they should be a disinterested third party outside of the family who has professional experience. Find someone who will avoid favoritism between family members. The Trust document should also indicate whether the Trust Protector is entitled to compensation and should always require the Trust Protector to be given access to the financial records, including, bank statements, contracts, and other documents. This way the Trust Protector can fairly evaluate the actions of the successor trustee to ensure they are acting appropriately.
If you’re interested in more information about a Trust Protector, please give us a call at 702-798-4955 to discuss the simple step to amend your trust agreement.
The probate attorney at Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change.
Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.


Probate Attorney Lee A. Drizin

Lee is an experienced Nevada Attorney. He focuses on probate, wills, trusts, guardianship and real estate for a wide range of clients.

Mr. Drizin been representing families for more than 30 years. He has represented families in all aspects of probate, trust and guardianship administration including, but not limited to, commencement of proceedings, will and trust contests, accountings, and sales of real estate.