Trust Protectors
by
Herbert D. Hinkle, Esq. and S. Paul Prior, Esq.
Hinkle & Fingles, Attorneys at Law
2651 Main Street
Lawrenceville, New Jersey 08648
(609) 896-4200 or (215) 860-2100
What is a trust protector? Not to be evasive, but first consider
this scenario: John and Mary establish a special needs trust (SNT) for
their only child, David, a severely disabled adult. Their niece,
Marilyn (or her children) will receive the trust assets when David
dies. Marilyn is also the trustee.
This situation could tempt Marilyn to conserve trust assets so that
she and her children will receive more later. Or, Marilyn might just
neglect her duties as trustee because she is busy with other tasks.
A trust protector is a person or organization named as a trustee to
oversee administration of the trust (the protector is not a
co-trustee, but Marilyn could be coupled with a co-trustee to help
prevent the problems mentioned above). The protector would review
administration of the trust periodically and determine (1) whether
David’s needs are being met as intended; and/or (2) to review the
trust investments to make sure that they are prudent.
The advantages of a trust protector over a co-trustee are several.
John and Mary can choose an organization - - such as ASA, CP, COSAC or
ARC - - which normally would not serve as trustee. Moreover, because
the protector has less responsibility than a co-trustee, their fees
might be cheaper.
Visit the authors’ website for other articles on special needs trusts
(and why many so called special needs trusts do not do the job).
______
Herbert D. Hinkle, his partner, Ira M. Fingles, and their colleagues,
S. Paul Prior and Valerie A. Powers Smith, maintain a statewide law
practice with offices in Lawrenceville, Marlton, and Florham Park, New
Jersey, and Yardley and Plymouth Meeting, Pennsylvania. They lecture
and write frequently on topics of law, aging, disability and estate
planning and are available
to speak to groups in New Jersey and Pennsylvania
at no charge.
Comments and suggestions
for future articles should be mailed to: Hinkle & Fingles, 2651 Main Street, Suite A, Lawrenceville, New Jersey 08648-1012.
Copyright 2005
Herbert D. Hinkle. All rights reserved.
