Trust protectors are a fairly new and not commonly used protection in the United States. In short, a trust protector is someone who serves as an appointed authority over a trust that will be in effect for a long period of time. Before trust protectors, these powers were generally held by the courts. Trust protectors ensure that trustees: maintain the integrity of the trust, make solid distribution and investment decisions, and adapt the trust to changes in law and circumstance.
Whenever changes occur, as they are bound to do, the trust protector has the power modify the trust to carry out the trust maker’s intent. Significantly, the trust protector has the power to act without going to court – a key benefit which saves time and money and honors family privacy.
Did you know that an irrevocable trust can be modified? If you didn’t, you’re not alone. The name lends itself to the belief that an irrevocable trust is on lockdown. However, the truth is that changes in the law, family, trustees, and finances sometimes frustrate the trust maker’s original intent. Or, sometimes, an error in the trust document itself is identified. When this happens, it’s wise to consider trust modification, even if that trust is irrevocable.
Here are three examples of when an irrevocable trust can, and should, be modified or terminated:
Estate plans are almost magical: they allow you to maintain control of your assets, yet protect you should you become incapacitated. They take care of your family and pets. And, if carefully crafted, they reduce fees, taxes, stress, and time delays. Estate plans can even keep your family and financial affairs private. But one thing estate plans can’t do is update themselves; you must act in order to update your estate plan.
You work hard for your money and want to ensure that your wealth distributions go according to your wishes upon your death. Sadly, many people simply don't understand the difference between wills and trusts and how they can affect inheritance. Don’t be one of them! Take control of your wealth distribution by understanding what wills don’t control and the benefits of a trust.
A 2012 study by Ohio State researcher Jay Zagorsky found that about one-third of Americans who receive an inheritance have negative savings within two years of getting their money, and of those who receive $100,000 or more, nearly one in five spend, donate or simply lose it all. If you are about to receive an inheritance, there are several steps you can take to insure your funds will last longer than a few years.