In our seminars, we usually tell the audience that there are three parties to a typical trust. The Settlor (sometimes called the “Grantor” or “Trustmaker”) is the person(s) who creates the trust. The Beneficiary is the person(s) who receives payments or use of trust property. The Trustee is the person or institution who carries out the Settlor’s instructions, safeguarding the trust property and making payments to or providing other benefits to the Beneficiaries.
While this is generally the case, over the past few years we have written more than a few trusts that include another key role, that of Trust Protector. A Trust Protector has only the specific powers granted in the trust document. Unlike settlors, trustees and beneficiaries, the Maine Uniform Trust Code provides no specific duties, rights or powers for the trust protector; the Code merely says that the trust document may give a third party the power to direct the actions of the trustee. In essence, the trust protector may be given some of the powers that the Settlor had, to be used after the Settlor no longer has any power to change the trust or direct the actions of the trustee. (This may come into play after the Settlor is deceased, or after the trust becomes irrevocable.)
Settlors are increasingly naming trust protectors, particularly for irrevocable trusts and other trusts that may endure for many years, because of the possible need to amend the trust to take into account changing laws and changing circumstances. Trust protectors have also become popular for trusts with beneficiaries who have an intellectual disability that may prevent them from enforcing their beneficial interest in the trust. The selection of a protector, the powers to be granted the protector and the standard of care required of the protector require thoughtful consideration by both the lawyer and the client.
The information presented on this website is general in nature and not intended to be legal advice. No attorney-client relationship will exist with Jones, Kuriloff & Sargent, LLC unless agreed to in writing. Please contact us to discuss your particular situation.