A trust protector is an individual or company appointed to oversee the trustee’s actions. However, it is important to note that most trust arrangements do not have a trust protector.
Generally, a trust arrangement has a grantor, trustee, and beneficiaries. The grantor is the person who creates and funds the trust, the trustee is responsible for carrying out the terms of the trust arrangement, and the trust beneficiaries have an income or principal interest in the trust assets.
A trust protector is an additional layer of protection to ensure the trustee is carrying out their duties under the trust agreement and in the best interests of the beneficiaries.
In cases where the trustee is not carrying out their duties as a responsible fiduciary, the trust protector can replace the trustee. The trust protector’s powers can be narrow or vast in scope.
Most trust agreements grant the protector the following powers:
- Power to add or remove trustees
- Power to add or remove beneficiaries
- Power to veto or approve distributions to beneficiaries
- Power to approve or veto amendments to a trust agreement