In the last several years, I have been called upon to draft multi-generational trusts for my clients. Commonly called the Dynasty Trust or a Perpetual Trust, these trusts are designed with individual Legacy Trusts to protect assets passing to children, grandchildren, or other beneficiaries from risks of divorce, mismanagement, death taxes, and the debts of the beneficiaries. These trusts usually run for multiple generations, therefore, the clients recognize the possible need to amend the trust in light of changing laws and circumstances. In addition, clients are also recognizing the need to name a Trust Protector for the family, which avoids the necessity in the future of having to involve a court to resolve disputes between beneficiaries or trustees, or asking a court to modify or change the Trust due to changes in the law or family situations.
A Trust Protector is one whose job is one of supervision, they are not trustees, but have the authority and power to correct matters in the future when necessary. Part of the appeal of a Trust Protector can be traced to the greater powers and discretion that modern trust law conferred upon as trustee managers of individual Trust. As the powers of the trustee have been expanded the client naturally worries about whether these powers would be used to carry out the intent of the Grantor but take away where they desire the trust to continue for the lifetime of the beneficiaries and their descendants. Therefore, the selection of a Trust Protector generally involves choosing an individual or company who is and will remain neutral.
Generally, a client will pick a CPA, Attorney, Law Firm, a trusted family member, or in some cases, a trust company or bank trust department to serve as a Trust Protector. The Trust Protector is not a fiduciary generally, but simply an independent person authorized to take steps to guarantee that the intent of the client is fulfilled.
Joseph T. Buxton III is the founder of TrustBuilders Law Group, Buxton and Buxton, PC with offices in Yorktown, Williamsburg and Urbanna, VA.