What Is a Trust Protector?

A trust protector is a person other than the trustee whom the trust document gives specific powers over the trust, such as approving or vetoing trustee decisions, removing and replacing trustees, or changing administrative terms. The label has no single legal definition: the powers come only from what the trust says, and in many states a directed-trust statute decides what duties the protector owes. The Uniform Directed Trust Act calls this person a "trust director" and treats "trust protector" and "trust adviser" as other names for the same role. In states that follow it, a trust director generally has the same fiduciary duty and liability as a trustee in a like position, unless the trust document validly says otherwise. This is general information, not legal advice.

At a glance

What a trust protector is

In a directed trust, the terms of the trust give a person other than the trustee a power over some part of the trust's administration. The Uniform Law Commission's Uniform Directed Trust Act (UDTA) notes there is "no consistent vocabulary" for that person: "trust protector," "trust adviser" and "trust director" are all in use. The Act's own terms are:

• Power of direction: a power over a trust, granted by the trust terms, that is exercisable while the holder is not serving as trustee. It can cover investment, management or distribution of trust property or other matters of administration.
• Trust director: the person who holds a power of direction, whatever the document calls them.
• Directed trustee: a trustee who is subject to that power.

The Act says it covers an arrangement that works like a directed trust even if the document uses "trust protector," "trust advisor" or "administrative trustee." A person can be a trust director even if they are a beneficiary or the settlor, although certain powers of settlors and beneficiaries are excluded.

What powers can a trust protector hold?

Only the powers the document grants. The UDTA commentary lists powers that a trust can give a trust director, including to:

• acquire, dispose of or retain an investment, or vote proxies for securities held in trust;
• adjust between principal and income, or convert to a unitrust;
• modify, reform, terminate or decant a trust;
• change the trust's principal place of administration, situs or governing law;
• determine the compensation of a trustee or trust director;
• prosecute, defend or join an action relating to the trust;
• give or withhold permission before a trustee acts, or veto or approve trustee decisions.

The commentary also says that giving someone the power to appoint or remove a trustee is a common drafting practice that grew up separately from directed trusts, and that the Act, as written, excludes it. Florida's statute does the same unless the trust terms "expressly provide otherwise by specific reference" to the directed trust part (Fla. Stat. § 736.1405(2)(b)). In practice a protector's removal power therefore depends heavily on how the document is drafted and on other state law.

Duties: is a trust protector a fiduciary?

The answer depends on the state and the document, but the model laws point the same way:

• UTC § 808 (the older Uniform Trust Code model). A trustee must follow a direction from a non-settlor holder of a power to direct, unless the attempted exercise is "manifestly contrary to the terms of the trust" or the trustee "knows the attempted exercise would constitute a serious breach of a fiduciary duty" the holder owes the beneficiaries. A person other than a beneficiary who holds a power to direct is "presumptively a fiduciary" who must act in good faith for the purposes of the trust and the interests of the beneficiaries, and is liable for any loss from breach.
• Uniform Directed Trust Act § 8. A trust director has the same fiduciary duty and liability as a sole trustee (if the power is held alone) or a cotrustee (if held jointly) in a like position and under similar circumstances. The terms of the trust may vary that duty to the same extent they could vary a trustee's.
• The trustee's side (UDTA § 9). A directed trustee must take reasonable action to comply with the director's direction and isn't liable for that reasonable action, but may not comply if doing so would be willful misconduct. Unless the terms say otherwise, the trustee has no duty to monitor the director, and the director has no duty to monitor the trustee (UDTA § 11).

Because documents can adjust these duties, two trusts that both name a "trust protector" can give the protector very different obligations.

State law examples

• Florida. The Florida Uniform Directed Trust Act is Part XIV of the Florida Trust Code, Fla. Stat. §§ 736.1401–736.1416 (enacted by ch. 2021-183). It applies to trusts whose principal place of administration is in Florida, and for trusts created before July 1, 2021, only to decisions and actions on or after that date (§ 736.1403). The statute gives a trust director the same fiduciary duty and liability as a trustee in a like position (§ 736.1408), makes the director submit to Florida courts by accepting the role (§ 736.1415), and ties the time limit for suing a trust director to the limits for suing a trustee (§ 736.1413). The older § 736.0808 ("Powers to direct," which tracked UTC § 808) appears in the 2020 statutes but not in the 2021 through 2026 compilations.
• Virginia. Virginia's Uniform Directed Trust Act is Article 8.2 of its Uniform Trust Code chapter (Va. Code § 64.2-779.26 et seq., 2020 c. 768). Its § 64.2-779.31 gives a trust director the same fiduciary duty and liability as a trustee in a like position.
• Other states. Vermont has also enacted a Uniform Directed Trust Act (effective May 13, 2024), and other states have their own directed-trust or trust-adviser statutes of varying scope. Don't assume your state follows the Uniform Act; ask which statute governs the trust.

What the statutes exclude

Directed-trust acts are about powers over a trust, not every power. Florida's list of exclusions (§ 736.1405) includes a power of appointment, a settlor's power while the trust is revocable, a beneficiary's power over their own beneficial interest, a power to add or release a power that makes the settlor the owner for federal income tax purposes, and a power the terms say is held in a nonfiduciary capacity where that is needed for the settlor's federal tax objectives. If a protector's power touches tax results, that needs review by an estate attorney or tax professional before the document is signed.

Trust protector, trustee and others: how the roles differ

Questions to ask before naming a trust protector

1. What exactly can the protector do, and what can't they do? Are the powers listed in the document, not left to a label?
2. Is the protector acting as a fiduciary, and does the document change that standard?
3. Who can remove or replace the protector, and who is the successor protector?
4. Is the protector independent of the trustee and the beneficiaries? Can a beneficiary or family member serve, and with which limits?
5. How is the protector paid, and what information must they receive and share?
6. Which state's law governs the trust, and has that state adopted a directed-trust statute?
7. Does any power have tax consequences, and who has reviewed that?

When a protector's decision is challenged

A beneficiary or trustee who disagrees with a protector's exercise of power may be able to bring a claim, and a protector can have duties to inform others and to avoid self-dealing under the document and state law. Time limits can be short. In Florida, for example, a claim against a trustee for breach of trust can be barred as little as 6 months after receipt of an adequate disclosure document or limitation notice (Fla. Stat. § 736.1008(2)), and the same limits apply to a trust director (§ 736.1413). See Can a Trustee Be Removed?, How Long Does a Trust Dispute Take? and What Is a Trust Modification?.

Related Haute Lawyer answers

• What Is an Irrevocable Trust?
• What Is a Revocable Trust?
• What Are the Duties of a Trustee?
• Can a Trustee Be Removed?
• What Is a Successor Trustee?
• What Is a Trust Modification?
• What Is a Spendthrift Trust?
• Estate Planning for High-Net-Worth Families

Find an attorney

• Find a Lawyer
• Estate & Trust attorneys
• Robert W. Haley — The Estate & Elder Law Center of Central/Southside Virginia, PLLC, Danville, VA; Estate Planning/Probate, Estate & Trust; Certified Elder Law Attorney (CELA®) per his profile
• Richard Scott Van Dyke — Van Dyke & Associates, APLC, San Diego, CA; Estate Planning/Probate, Estate & Trust; his profile says that since 1998 his practice has been limited to litigation, trial and appeals of contested probate matters, including will and trust contests, trustee removal and contested accounting actions

This article is general information, not legal advice, and doesn't create an attorney-client relationship. Talk to a licensed attorney in your state about your situation.