A trust protector with expansive non-fiduciary powers renders the arrangement a pseudo-trust

Charles E. Rounds, Jr.
Contact

Text

In some jurisdictions a trust protector is allowed to exercise critical powers in a non-fiduciary capacity, provided the terms of the particular trust specify that he may do so. See, e.g., 12 Del. C. §3313(a); IMO Ronald J. Mount 2012 Irrevocable Dynasty Trust U/A/D Dec. 5, 2012, C.A. No. 12892-VCS (Del. Ch. Sept. 7, 2017) (the Vice Chancellor honoring a provision in a trust instrument that the protector shall exercise his expansive powers in a non-fiduciary capacity). It would seem that such arrangements are actually pseudo-trusts, accountability being the sine qua non of a true trust. One has to wonder why a typical prospective settlor who has been fully informed of the applicable facts and law would ever knowingly elect to deprive his beneficiaries of fiduciary protections. Look for suits against lawyers and others who fail to apprise their principals of the cons, as well as the pros, of settling such pseudo trusts. Cf., §9.9.25 of Loring and Rounds: A Trustee’s Handbook (The Quiet or Silent Trust May Not Be a True Trusts), which section is reproduced in its entirety in the appendix below. It goes without saying that a trust protector who had been acting as estate-planning lawyer for the settlor of a pseudo-trust would have been subject to fiduciary constraints for his pre-settlement interactions with the settlor notwithstanding the terms of the trust.

The article has been downloaded and is available below.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles E. Rounds, Jr., Suffolk University Law School | Attorney Advertising

Written by:

Charles E. Rounds, Jr.
Contact
more
less

Suffolk University Law School on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.