A trust protector is a person or group of people (not the settlor, beneficiary, or trustee) who are appointed to exercise one or more powers affecting a trust and the interest of the beneficiaries. The concept of a trust protector is to protect beneficiaries from a rogue trustee. They can often make changes to a trust involving who the trustees are, investment decisions, change how distributions are made and in some cases modify or terminate a trust.
They can provide help when circumstances change and the settlor's intentions are not being dealt with properly. While a trustee has fiduciary duties, in most cases a trust protector acts as an agent of the settlor and may not have the same duties as other trustees.
Others argue that you should impose fiduciary duties on the trust protectors and make them accountable to the beneficiaries. As such, it is important to have detailed discussions with clients about the roles and responsibilities of trust protectors. Their powers and limitations should be clearly defined to limit the scope of their actions.
Some recommend that while imposing a fiduciary duty on a trust protector, the claims can be limited by removing liability for simple negligence but not gross negligence or when their conduct amounts to a willful breach of their fiduciary duty.
If you have trust protectors in your trust, it is important to review the powers and limitations and to what standard they will be held if they damage the beneficiaries.
If you would like to add trust protectors to a trust to protect from improper actions of a named trustee or in the event of changed circumstances which may frustrate the settlor's intentions, you should contact a Florida Estate Planning Lawyer to discuss your circumstances and desires.