Thoughts on the Types of Powers You May Give to a Trust Protector
As I have stated before, a Trust Protector does give your estate plan much more flexibility after you pass away. But there are always drawbacks to giving flexibility to your estate plan.
Here are a few thoughts regarding the powers that you may give to a Trust Protector:
a. Grantor should be very careful in granting powers to the protector and should always have a complete understanding of the consequences of each power given to the trust protector.
b. Rarely a good idea to give the trust protector very broad powers to deal with every possible change in circumstances that may occur in the future.
c. Should anticipate the powers that will most likely assist in carrying out the trust purposes which would be better in the hands of someone other than the named trustee.
d. There are some powers that would be helpful in most situations that the grantor should consider.
e. Ex) Protector could be given the power to amend the trust to comply with new tax laws or to address any changes in the law or circumstances of a trust or its beneficiaries that would significantly change the tax treatment of the trust or its beneficiaries.
f. Some powers, however, such as the power to grant, expand, reduce or eliminate a power of appointment, the power to change eliminate or add provisions regarding the disposition of income and principal or the power to change beneficiaries should be looked at more closely.
g. Care should be taken to clearly define the purposes of the trust and to give the trust protector ample guidance as to what is expected and allowed and what is not.
To learn more on trust protectors, please consult our estate planning attorney at Wood, Atter & Wolf, P.A. in Jacksonville and Ponte Vedra Beach, Florida.
