[WSBAPT] Trust Protectors

[Douglas Bratt]

Listmates:

I have recently been doing some research regarding the role of a Statutory Trust Advisor, which is discussed in RCW 11.98A.030.

The gist of the appointment of a Statutory Trust Advisor seems to be the desire to have a mechanism, particularly in high asset situations, with potential multiple generational beneficiaries, to have someone, or some institution (separate from the Trustee) empowered to oversee the Trust and the Trustee to make sure that the focus of the original trust is being adhered to, to make adjustments in trust provisions, as may be advisable because of changes in the law, to approve discretionary distributions to beneficiaries, and the like.  The earlier reading seemed to be that this is something that the Trustor might be interested in to essentially keep the Trust on track.

However, later reading has led me to the conclusion that Trustees themselves, particularly institutional Trustees, are insisting on the appointment of a Trust Protector (the phrase used by at least one institutional Trustee, and a phrase included in the statutory definition of a Statutory Trust Advisor) in order to seemingly remove the Trustee from criticism (and possible liability) in exercising discretionary powers (like discretionary distributions to Beneficiaries) that Trustees have traditionally been empowered, and expected, to do.  Review of Trust Instruments by Trustees, prior to acceptance of the responsibilities of serving as Trustee, includes a requirement, in some instances, that the Trust Protector provisions be in place, with a prospective Trust Protector already designated.

Has anyone been running into these sorts of situations?  Do any of you have reference to Washington-based materials and/or Washington forms used in these sorts of instances?  I am dealing with a proposed institutional Trustee who, I suspect, has such requirements in place.

I thank all of you, in advance, for your thoughts.

Best Regards,

Doug Bratt


Douglas J. Bratt
Lawyer

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