When we sit down with clients to discuss estate planning in Michigan, we often find that one of the lesser-known but highly valuable roles in a trust is that of the trust protector. Many people are familiar with trustees, beneficiaries, and grantors—but few understand the function and importance of a trust protector. This role can be critical, especially in long-term or complex trust arrangements. As estate planning attorneys with offices in Troy and Shelby Township, we believe it’s important that every client in Oakland and Macomb County understands the powerful flexibility that a trust protector can bring to their plan.
Trust protectors serve as a form of oversight and adaptability within a trust. Trust protectors help make sure that the trust continues to operate as intended, even if circumstances change after it has been established. Whether dealing with a shift in family dynamics, changes in tax laws, or concerns about trustee performance, a trust protector can offer an added layer of security for your legacy. Including a trust protector in your estate plan gives you a tool for long-term control and reassurance.
In Michigan, trust protectors are not explicitly named in the Estates and Protected Individuals Code (EPIC), codified at MCL 700.1101 et seq., but their use is permitted and becoming more common. Michigan law allows for considerable flexibility in trust drafting, and the Michigan Trust Code permits the inclusion of provisions that grant authority to a third party to modify or oversee trust administration. Specifically, MCL 700.7105(2) states that the terms of a trust may expand or restrict the duties and powers of a trustee, trust protector, or other fiduciary roles. As long as the role is clearly spelled out in the trust document, courts will generally uphold it.
What Does A Trust Protector Do In A Michigan Trust?
A trust protector can be granted a range of powers depending on what is outlined in the trust document. These powers often include:
- Removing or replacing trustees
- Modifying trust provisions to comply with changes in tax law or other legal developments
- Resolving disputes between trustees and beneficiaries
- Approving distributions
- Vetoing investment decisions or directing investment strategy
Trust protectors are typically used in irrevocable trusts, which are more difficult to modify after creation. This makes their role especially important in cases where the trust is intended to last for multiple generations or to manage ongoing business or real estate interests.
Why Consider Adding A Trust Protector?
Michigan residents often use trusts to protect assets, avoid probate, and manage tax implications. But what happens when laws shift, relationships evolve, or unforeseen issues arise? That’s where the trust protector becomes essential. Their powers can be carefully tailored to meet your needs, offering flexibility without opening the door to total trustee discretion or court intervention.
Let’s say the trustee develops a conflict of interest or fails to act in the best interest of the beneficiaries. If your trust includes a protector with the authority to remove and replace that trustee, your family avoids a lengthy and expensive court battle. Or, imagine a federal or Michigan tax law changes in a way that affects your trust’s goals. A protector with limited modification powers could help update the trust to align with your original intent.
Selecting The Right Trust Protector
We advise our clients to think carefully about who to choose as their trust protector. This person should be trustworthy, impartial, and capable of understanding the trust’s purpose. In some cases, a trusted friend or family member may be appropriate. In others, it may be better to appoint a professional, such as an attorney or financial advisor, who is not a beneficiary or trustee.
While the Michigan Trust Code does not mandate how a protector must act, fiduciary standards may apply depending on the nature of their powers. This is why your estate planning attorney should clearly define the trust protector’s responsibilities and limitations in writing.
Trust Protectors And Legal Oversight In Michigan
Because Michigan recognizes the freedom to draft customized trust provisions under MCL 700.7105, your trust can include almost any legal and reasonable power for the protector. However, courts will interpret any ambiguous or broad language conservatively. To prevent future conflicts, it’s important that your estate plan defines the trust protector’s role with clarity and precision. This ensures the protector can act effectively while also avoiding the appearance of overstepping or acting outside their scope of authority.
We regularly help clients in Troy, Shelby Township, and throughout Oakland and Macomb Counties draft or amend trusts to include appropriate protector provisions. Whether you are establishing a new trust or need to update an existing one, our goal is to ensure your estate plan works as intended—today and in the future.
FAQs About Trust Protectors In Michigan
What Is The Main Difference Between A Trustee And A Trust Protector?
A trustee is responsible for the day-to-day administration of the trust, including making distributions, managing investments, and maintaining records. A trust protector serves more of an oversight role. In Michigan, a trust protector’s powers are only what the trust document specifically grants them, unlike a trustee whose duties are governed more broadly under state law.
Is A Trust Protector A Fiduciary Under Michigan Law?
It depends on how the trust is written. Michigan law does not automatically classify a trust protector as a fiduciary. However, courts may treat a trust protector as a fiduciary if they are granted powers that directly affect the interests of beneficiaries or if the trust document specifically imposes fiduciary duties. We recommend that trust documents clearly state whether the trust protector acts in a fiduciary capacity to avoid legal uncertainty.
Should I Use A Trust Protector In My Revocable Living Trust?
In most cases, trust protectors are more commonly used in irrevocable trusts. A revocable living trust can be changed or revoked at any time by the trust creator, making a trust protector unnecessary. However, if your revocable trust is expected to become irrevocable upon your death and last for many years, including a trust protector might provide valuable flexibility for your heirs and beneficiaries.
Can A Michigan Court Overrule A Trust Protector’s Decisions?
Courts typically defer to the authority granted in the trust document unless the protector has acted outside the scope of their power, breached a fiduciary duty (if applicable), or violated public policy. This is another reason why your trust should clearly outline the trust protector’s powers and any limits. When drafted correctly, a trust protector’s decisions carry significant weight and can help avoid costly court involvement.
Call Boroja, Bernier & Associates About Including A Trust Protector In Your Estate Plan
At Boroja, Bernier & Associates, we help families in Troy, Shelby Township, and throughout Oakland and Macomb Counties create secure, future-proof estate plans. If you’re considering a trust protector or need to update your trust to include one, we’re ready to assist you with every detail.
To discuss how a trust protector could benefit your Michigan estate plan, call our Michigan estate plan attorneys at 586-991-7611 to schedule your consultation. We proudly serve clients throughout Oakland County and Macomb County, and we’re here to help you protect your family and your legacy.
