Bove, Alexander A., Jr. Trust Protectors: A Practice Manual with Forms. Juris Publishing, 2014.
322 pages. $175 from the publisher - click here to order.
Written by Boston-based trust and estates attorney Alexander Bove, who is an internationally known expert on trust protectors, this volume is an important resource for special needs planners who use trust protectors in their special needs trusts. Even without the practical information and the forms, which are worth the price tag on their own, readers are still left with plenty to digest thanks to Bove's thoroughly researched discussion of international trust protector statutes and case law, along with a vigorous argument in favor of treating trust protectors as fiduciaries.
The use of the title "trust protector" to refer to a person or entity that has certain typically supervisory powers over a trust without being a trustee is a relatively new development. The term can likely be traced to the rise of offshore asset protection trusts in the 1980's, although Bove goes to great lengths to argue that there is virtually no difference between the trust protector and the trust advisor, a position that has been around for more than a century. Trust protectors are so new that, according to Bove, there have been only 50 reported cases worldwide dealing with the subject, and most of these have been decided outside of the United States. (There is a much more established trail of U.S. caselaw addressing trust advisors, but Bove points out that courts have been loath to apply that precedent to trust protectors.)
Why, then, do we need the 195 pages that the book devotes to commentary on trust protectors? The truthful answer is that, as things stand right now, we probably don't, especially given the dearth of court decisions, scarcity of statutes specifically governing trust protectors and the ability to draft around almost any provision of the Uniform Trust Code.
That said, most practitioners who draft special needs trusts should probably still consider purchasing Trust Protectors. This is because beyond the content that probably doesn't apply to most special needs planning practices, like the extensive discussion of asset protection strategies, the book still contains much helpful information and food for thought.
For instance, Bove's often-repeated central argument is that trust protectors should almost always be considered fiduciaries who must be held accountable for their actions and who typically have a duty to actively monitor the trust, despite common boilerplate exculpatory provisions. While Bove's viewpoint probably gives the lawyer who serves as a trust protector the jitters, it should encourage the drafter of a trust containing a trust protector to seriously consider whether it is appropriate to create a position vested with powers that rival the trustee's and yet excuse the protector from any responsibility to actually exercise those powers.
Although some portions of the book read more like a law review article than a practice manual, Bove's treatise contains comprehensive and helpful chapters on the difference between treating a trust protector as a fiduciary versus someone with a personal power (like a general power of appointment), potential liabilities for trust protectors (and the lawyers who draft trust protector clauses), the relationship between the trust protector and the trustee and, most importantly, 63 pages on "Practical Issues in Using Protectors." This is the part of the book that most special needs planners will find themselves coming back to for ideas and insight into topics like the selection of a trust protector, drafting considerations and detailed descriptions of virtually any powers that could be given to a trust protector.
Although the law surrounding trust protectors is still in its infancy, special needs planners, who often utilize trust protectors in special needs trusts, will likely be well served by reading this valuable and thought-provoking work.
Eric Prichard is an attorney who concentrates on estate and special needs planning for the law firm of Brown & Brown, P.C. in Bedford, Massachusetts.