A recent article in the New York Times by John F. Wasik provides an excellent discussion of trust protectors. Many states now allow for trust protectors – – someone other than the trustee who essentially provides some checks and balances in a trust arrangement.
A trust protector is a bit like a watchdog. He or she is not the trustee, but rather someone who keeps an eye on the trust (and the trustee) to be sure it is operating the way it was intended to.
A trust protector also might be able to make certain changes in an irrevocable trust arrangement in response to changes in the law. Since asset protection statutes, tax laws, and trust laws are changing so rapidly these days, it is advisable to build as much flexibility as possible into an irrevocable trust.
A trust protector may be given the power to replace the trustee under certain circumstances, which obviously provides a very significant check on the power of the trustee.
The role of a trust protector should be discussed with your asset protection attorney and/or your estate planning attorney whenever you set up an irrevocable trust.