FPC #8: Trustees & Trust Protectors

One of the most important (if not THE most important) considerations in estate planning is: how to select trustees.

Compounding this concern is the new need for trust protectors (no, they are not the same) — how do you select them? can, or should, you select them?

• How many trustees should you have?
• Should your kid be a trustee? other family members?
• How will you handle indemnification if they blow it? Should trustees be compensated and obtain their own insurance, even if related?
• How should trustees be removed?
• What qualifications make for a good successor trustee? how are these affected by other factors like type of assets, family situation?
• What are the advantages and disadvantages of using a corporate trustee?
• Should you give others the power to name successor trustees?
• What the heck is a trust protector and what can they do? what should they do, for different situations and planning goals?
• How does a trust protector benefit an estate, and how does it differ from a trustee?
• Should you name a committee as trust protector?
• Because California will likely treat trust protectors as fiduciaries sharing joint and several liability with trustees, and trustees may balk at serving under those circumstances, should you avoid naming a trust protector now, and simply set up a procedure for naming one later when situs can be changed?
• Should a trust protector have trustee-like powers?
• Should a trust protector be held to a fiduciary standard for all powers? only for some?
• How might certain trust protector powers create conflict with trustees and beneficiaries?
• Could certain trust protector powers actually thwart, rather than preserve, settlors’ intent?
• How should succession of trust protectors be handled?
• How are trust protectors to be compensated? indemnified? should another party confirm fees?
• Should a trust protector be individual or corporate?
• What are the qualifications for a trust protector generally? from a tax standpoint (i.e., preventing estate inclusion)? asset protection?

This is one of the focus topics we present on a revolving basis at our weekly “guntrust Challenge” competitions — part shooting match, part quiz show.

So come visit our Family Protection Clinic and gain expertise on estate planning and self-defense!