An increasingly common technique used in trusts is to designate a trust protector. A trust protector is different than the settlor, trustee and beneficiary. Because the trust protector concept is relatively new, there has been uncertainty regarding the trust protector’s authority in trust administration, litigation and breach of trust suits.
To address this uncertainty, Missouri recently (as of this writing) amended/created Section 456.8-808, RSMo to enunciate what types of powers that a trust protector may be granted. Those include, without limitation, the following:
(1) Remove and appoint a trustee or a trust protector or name a successor trustee or trust protector; (2) certain modification/amendments to the trust instrument; (3) increase, decrease, modify, or restrict the interests of the beneficiary or beneficiaries of the trust; (4) terminate the trust in favor of the beneficiary or beneficiaries of the trust; and (5) change the applicable law governing the trust and the trust situs.
Importantly, a trust protector is required to act in a fiduciary capacity in carrying out the powers granted to the trust protector. As a result, it is possible to make an independent claim for breach of fiduciary duty against a trust protector.