The New Wisconsin Trust Code: Trust Protectors

March 24, 2014

In many cases, the creators of trusts want to give someone other than the trustee or a beneficiary the power to make a decision or take an action regarding the trust. This could include actions relating to the trustee such as replacing the trustee, approving the trustee’s accounting or allowing the trustee to sell certain assets. It could include powers over a beneficiary such as vetoing or allowing a distribution, changing the time when a trust ends or even eliminating a beneficiary. The new Wisconsin Trust Code specifically authorizes the appointment of a “trust protector” who is not the trustee or a beneficiary.

A trust protector is a person granted specified oversight powers over the trustee, trust and trust assets as provided under the law and trust document. The new law provides a laundry list of powers that are exercisable by a trust protector. A trust protector may have powers other than those listed under the statute as granted by the trust document. In addition to the powers detailed above, a trust protector may have the power to:

  • interpret or enforce the terms of the trust at the request of the trustee;
  • eliminate or modify the interests of a trust beneficiary;
  • resolve disputes between the trustee and a beneficiary;
  • modify the interests of a beneficiary or add a new beneficiary.

A trust protector can request and must be provided information from the trustee with respect to areas over which the trust protector has a power. However, a trust protector does not have a duty to monitor the trustee. Likewise, a trustee does not have the duty to monitor the trust protector.

More clients are selecting a corporate trustee for their trusts instead of a relative or other individual. The appointment of a trust protector may provide a role for clients’ trusted relatives to weigh in on trust matters while ensuring the trusts are administered professionally. As the scope of a trust protector’s powers under the law and governing instrument will vary greatly depending on each client’s goals, please contact us to discuss the role of a trust protector in your estate plan.

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For more information about "The New Wisconsin Trust Code: Trust Protectors," contact Melissa K. Warner at mwarner@axley.com or 608.283.6782.