When it comes to safeguarding your assets, trusts are powerful tools. One of the most effective ways to secure your assets is through a trust protector. But before you can take advantage of the benefits of a trust protector, it’s important to understand what this figure does and how they can protect your assets.
What Is a Trust Protector?
A trust protector is an individual or entity that holds a fiduciary duty to watch over and enforce the terms of the trust. In certain types of trusts, a trust protector is granted the authority to alter, amend or even terminate the trust. They serve as an independent third-party to ensure the trust is managed in an appropriate manner, for the benefit of the beneficiaries and as instructed by the settlor (the person who establishes the trust).
Why Is a Trust Protector Useful?
A trust protector provides an additional layer of security for the trust and its assets by ensuring the terms of the trust are being followed. They help to prevent any possible acts of misconduct by the trustee and grant the beneficiaries peace of mind that their assets are in safe hands. Trust protectors also help to ensure the trust is kept up to date by adding or removing terms if necessary.
What Powers Does a Trust Protector Have?
A trust protector typically has the power to approve or veto decisions made by the trustees, such as the allocation of income and capital assets to the beneficiaries. They can also change trustees or grant distribution powers that are not included in the trust deed. Trust protectors also have the power to appoint or remove professional advisors and make sure the trust is properly funded.
Types of Trust Protector
Trust protectors can be individuals such as family members or attorneys, or they can be institutional entities such as banks or other financial institutions. Depending on the type of trust you have, different rules apply for appointing the trust protector. It’s important to get legal advice to make sure you choose the right type of trust protector to suit your needs.
Conclusion
A trust protector is a useful tool for ensuring the terms of your trust are upheld, and that your assets are protected. By appointing a trust protector to look after your trust, you can have peace of mind that your beneficiaries’ assets are in safe hands. Make sure to carefully consider the type of trust protector you need before you make any decisions to ensure you get the best possible outcome.