It used to be that you would write out your will, name some trustees and hope for the best for all of eternity. But, increasingly, folks aren't leaving it to luck. They're appointing a "trust protector," someone given broad power to reshape your trust over time.
Trustees are a special kind of hero to the trusts and the families they oversee, and that’s a tough gig as many will know. Nevertheless, some problems call for superheroes. In the context of some trusts, some problems call for “trust protectors.”
The idea got some recent limelight from Barrons, and this article there, but essentially the difference between a trustee and a trust protector is the level of power they have over the trust itself. A trustee has the power to uphold the document as it was written and getting something dramatic done might involve petitioning for a court order; it can mean being stuck between a rock and a hard place but valiantly working with what you were given. A trust protector, on the other hand, has broad powers to change the trust as they see fit but always in the name of the greater good that is the intentions of the drafter.
That might mean overriding debate among parties to the trusts, moving the trust from state to state, terminating the trusts, and a host of other possible superpowers. This gives a definite malleability to your trust arrangement, especially if you are creating an irrevocable trust or something as long lasting as an actual dynasty trust. The benefits are obvious.
On the other hand, as the “maker” of the trust, it can be a difficult thing because it means entrusting all of your own powers to someone else. In essence, you literally are choosing someone to do as you would do and maybe even with the hope that they would do it better.
It may make for a powerful meditation on the role of the person who sets up the trust, since they create their own heroes and superheroes.
The trust protector is not a recognized role in every state – only about half of them, in one form or another – and so that is something investigate, as with any trust arrangement.
In the end, the drafting of any advanced trust will require a skilled hand and tempered judgment, and so too with a trust that empowers a so-called “trust protector,” if not evn more so.
Reference: Barron’s (March 3, 2012) “Why You May Need A ‘Trust Protector’”