New Florida Case Sheds Light on Trust Protectors

The new notion of “trust protectors” is based on the idea that a trust can be much more flexible if someone has the power to make at least some changes after the trust becomes irrevocable.  The exact powers of a trust protector is typically spelled out in the trust document, and often includes the power to amend or terminate the trust, the change beneficiaries, or to remove a trustee and name a successor. 

Although trust protectors have been a recent “hot topic,” they are still new enough to not have been spotted in the court system very often.  This is partly because a trust protector’s existence is to avoid the need for court action.  Mostly, however, the idea is too fresh, and has not been solemnized in many states. 

Arizona is one of the few states that has a specific statute allowing trust protectors.  States are increasingly codifying similar provisions, often as part of the Uniform Trust Code (UTC).  In 2008, Florida adopted its version of the UTC.  Subsequently, an appellate case in Florida gives some insight into how the trust protector may be utilized. 

The case involved a man who created a revocable living trust, with a provision allowing a trustee to name a trust protector in order to amend the trust to clarify any ambiguity in the future.   The Court of Appeals held that the trust protector’s action to clarify an ambiguous provision was clearly within his authority, and the amendment was valid.  “From the trust protector’s affidavit, it appears that the husband settled on the multiple-trust scheme for the very purpose of preventing the children from challenging the manner in which the wife spent the money in the trust he had established.”   The court decided this purpose should be upheld.  Minassian v. Rachins, Dec. 3, 2014. 

See Robert Fleming, New Florida “Trust Protector” Case Shows How the Idea Can Work, Fleming & Curti PLC, Dec. 8, 2014.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.