Serving North Carolina
Florida, New York and Tennessee
(800) 201-0413

Check out our blog for regular postings about our practice areas and other topics of interest.


3 Questions When Adding a Trust Protector to an Existing Trust

Posted on: May 8th, 2017
checklistTrust protectors can be added to many existing trusts if certain requirements are met. The trust document, jurisdiction, and other factors affect whether protector provisions may be added. 

A trust protector is an individual or party who oversees trust administration in many capacities. They can monitor trustee actions and replace or remove trustees, add or remove beneficiaries, modify the trust, and more, depending upon the scope of their authority as defined within the trust document. 

Since trust protector powers offer flexibility and ease of administration, and provisions are not included in the trust document by default, many individuals find themselves in a situation where they wish to add trust protector provisions to an existing trust. If you are considering adding trust protector provisions to a trust, consult with a trust attorney who has experience managing these provisions. Outlined below are a few questions that should be discussed during a consultation with a trust attorney, and a formal review of the specific trust document can better guide options:
 
  1. Is the trust irrevocable? Trust protectors may be added to some irrevocable trusts. Decanting, the process of transferring trust assets from one trust to another with more favorable terms, is usually possible if the grantor is still alive and the jurisdiction where the trust is administered permits decanting. If the trust is a revocable trust, trust protector provisions are easily added to new and existing trusts. The processes used to modify domestic trusts are not provided in all jurisdictions in the United States. For example, as of this writing only 25 states have statutes that permit decanting. If the trust is not located in a jurisdiction that permits decanting, an attorney can advise regarding potential alternative methods.
  2. Is the grantor still alive? As noted in the previous example, whether the grantor is alive or deceased can affect the ease of modification. Since a trust is implemented to carry out the grantor’s intent, if the modification occurs post-mortem, review of trust terms will be necessary to ensure the grantor’s intent is preserved.
  3. What is the Trust Code? Review the statutory requirements for trust modification in the jurisdiction where the trust is administered. Some territories provide more favorable laws than others, which may prompt not only modifying the trust to include a protector, but also moving the trust to a different jurisdiction.

While it may seem like a burden to carry out the process for adding trust protector provisions to an existing trust, the long-term benefits are generally worth the time and effort. Our new legal guide Trust Protectors 101 helps individuals and practitioners to understand more about these unique trust provisions. Request a copy at the prior link.
 
Share |

Comments (0)



Post a comment
You have to login or register in order to post comments
Forgot Password? Enter Login Email


Login

Your Email:
Password:
Remember me

Subscribe

Get email notifications when we post new blogs. Subscribe Now!

Categories

Archive


View All Blog Posts