Family trusts are some of the most popular instruments in estate planning. When Washington residents set up a trust to take care of their family members after they are gone, they rely on the trustee's good judgment and skills to see that the trust property is cared for and the beneficiaries are treated well. However, a family trust can last a long time and a lot can happen before the time comes for the trust to be dissolved. Estate laws can change. The trustee can die. If the trustee is a business, such as a bank, the trustee can be sold. However, removing a trustee ordinarily requires a court order, often at the cost of a long legal dispute.
One way to avoid that cost is through the use of another party, sometimes known as a trust protector, who has certain rights over the trustee. Exactly what rights the protector has can depend upon the wording of the trust itself and the provisions of state law.
In some cases, protectors may be able to add new beneficiaries as new grandchildren are born, or adjust the provisions to beneficiaries when their needs change. Typically, the trust protector has the right to fire the trustee and appoint a new one if the protector no longer feels the trustee is fulfilling his or her duties.
Trust protectors have started to become more common only in the past 20 years or so, and not every state allows for them. Washington's laws regarding trusts and protectors are different from the laws of some of the other states that provide for protectors. Because the law is still evolving, it's important for those considering a trust protector to work closely with a qualified Washington attorney with experience in estate planning.
Source: NYTimes.com, "Guardians of Trusts," John F. Wasik, March 12, 2014