CGA Law News & Blog

What is a “Trust Protector” and Should you Utilize One?

access_time Posted on: October 15th, 2024

From Attorney Tim Bupp, chair of the CGA Law Firm Estate Law practice group.

In today’s world, good estate planners have increasingly complex and powerful tools that they can use in your documents to provide protection for your loved ones and your resources in a variety of situations.  Trusts themselves have become increasingly complex, and sometimes trust provisions come into conflict with new changes in law or practice.  This is where a “trust protector” can become a useful tool to make your documents work well, even in new and challenging situations.   

1.        What is a “Trust Protector”?  A trust protector is an officer appointed in your estate planning documents who has powers separate from and complementary to a trustee.  While a trustee has a range of powers and duties to the creator of the trust and to its beneficiaries, a trust protector’s powers and utility are often very specific.  The trust protector is intended to address conflicts that arise when the provisions of the trust are affected by changes in law in ways that were unexpected and could produce detriment to the beneficiaries or the function of the trust.  The trust protector has the power to step in and resolve ambiguities or conflicts with the law and assure that the trust is interpreted in the way that the settlor would have wished, even if the settlor is no longer around. 

2.        How does the trust protector work?  In my experience, the most useful roles of the trust protector are to correct ambiguities in the document or to provide input related to changes in the tax code.  Let’s imagine that an irrevocable trust was set up to benefit grandchildren under tax laws.  What happens if the laws change unexpectedly?  The function or purpose of the trust may be affected in unforeseen ways, and the perceived benefits of the trust may turn instead into detriments to all involved.  In such circumstances, the trust protector’s power may be invoked by the trustees or beneficiaries to properly interpret the trust in accordance with the settlor’s actual wishes.  Under the right circumstances, it may be possible to restore the proper function of the trust without violating its legal or intended requirements.

3.        What services might a trust protector provide?  For example, a trust protector may serve the role of correcting ambiguities in the document that are created or revealed by changes in the law, thereby assuring that the settlor’s purposes are followed.  Under the right circumstances, a trust protector may be called upon to nominate or appoint a successor trustee or a non-interested trustee where the trust language does not provide such roles.  In some cases, a trust protector may be able to “decant” a trust into a separate trust to provide new protections while not interfering with the trust’s original purpose or language.  A trust protector may or may not be a fiduciary under the trust and may serve differing purposes depending upon these different circumstances.   

A trust protector is just one of many tools that can be brought to bear to serve you in your estate planning and to safeguard and control your estate and assets as you intend.  If you have more questions about this or any other question related to estate or trust planning, reach out to CGA Law Firm for guidance. 

Tim Bupp has practiced for twenty-five years with CGA Law Firm in estate planning, estate administration, and elder law. Tim is an Accredited Estate Planner (AEP) by the American Association of Estate Planning Councils and a Certified Elder Law Attorney (CELA) by the National Association of Elder Law Attorneys. He is certified in Estate Planning and Pension Law Planning by the Temple University Beasley School of Law, from which he also holds a Master of Laws degree in Tax Law. He also holds a JD from the Pennsylvania State University Dickinson School of Law, an MBA from York College of Pennsylvania, and a Bachelor of Science degree from Penn State. Tim has chaired the Estate Law Section of CGA Law Firm for ten years, where he is a shareholder.  Reach Tim at tbupp@cgalaw.com or 717.848.4900. 

Timothy Bupp

Estate Law Chair, Shareholder

Timothy J. Bupp is a Shareholder with CGA Law Firm and chairs the Firm’s Estate Law Section. He provides clients with specialized advice in Estate Planning, Business and tax planning, Real Estate transactions and related matters. Tim assists his clients by utilizing the knowledge he gained from his advanced degrees in business administration, business taxation, and law, as well as his certifications in estate planning and employee benefits taxation.

Read Tim’s Bio Page in full HERE.