Houston Estate Planning and Elder Law Attorney Blog
A trust written to last for decades in Texas will outlive the assumptions behind it. Trustees die, resign, or stop doing the job well, and tax law can change several times over the life of a single trust. Texas allows the person creating the trust to name someone with authority to respond to those changes later, without a court proceeding, by writing a trust protector into the document.
A trust protector in Texas is a person the trust terms give power to oversee or adjust the trust, and the Property Code treats a protector as a type of trust advisor. The trust can authorize a protector to remove and appoint trustees and to amend the trust’s terms for tax or administrative purposes. Texas generally treats a protector as a fiduciary. McCulloch & Miller, PLLC drafts protector provisions for Austin families as part of its trust planning practice.
How Texas Law Defines a Trust Protector
The governing statute is Property Code § 114.0031, titled “Directed Trusts; Advisors.” It says that “advisor” includes a protector, and that anyone the trust terms authorize to direct, consent to, or disapprove a trustee’s investment, distribution, or other decisions is an advisor. The section was added in 2015 and amended in 2019, and it does not apply to charitable trusts.
A protector holds whatever power the trust terms grant. Section 114.0031(d) lists powers those terms may include:
- removing and appointing trustees, advisors, trust committee members, and other protectors;
- modifying or amending the trust terms to achieve favorable tax status or to make administration more efficient; and
- modifying, expanding, or restricting the terms of a power of appointment the trust grants to a beneficiary.
That list is permissive. A trust can grant other powers, and a protector has only the powers the document actually gives.
The third power on the list is less familiar than the first two. A power of appointment is a right the trust gives a beneficiary to direct where trust property goes, often at the beneficiary’s death. A protector who can expand or restrict that power can adjust a beneficiary’s control over the trust’s eventual distribution without rewriting the rest of the document.
Is a Texas Trust Protector a Fiduciary?
Under § 114.0031(e), an advisor is a fiduciary regardless of trust terms to the contrary, with one narrow exception. The trust may let a protector act in a nonfiduciary capacity only if the protector’s sole power is to remove and appoint trustees, advisors, committee members, or other protectors, and the protector does not use that power to appoint itself. A separate subsection preserves nonfiduciary powers the Internal Revenue Code requires for grantor trust treatment.
For most protectors, then, fiduciary duty comes with the role, and the choice of person deserves the same care as the choice of trustee. Questions like this one are cheaper to answer before signing than after. Call McCulloch & Miller at (713) 333-8900.
What Happens to the Trustee’s Liability
Naming a protector or other advisor also changes the trustee’s exposure, and the statute sets two different standards. A trustee who follows an advisor’s direction, as the trust terms prescribe, is not liable for resulting loss except in cases of wilful misconduct. Where the trust requires the advisor’s consent and the advisor fails to give it after being asked, the trustee is not liable except for wilful misconduct or gross negligence.
Unless the trust says otherwise, a directed trustee also has no duty to monitor the advisor, to advise or consult with the advisor, or to warn beneficiaries when the trustee would have decided differently. A protector does not replace the court, though. Section 111.0035 keeps trust terms from limiting a court’s power to remove a trustee or to exercise its jurisdiction over trusts, so the remedies covered in the firm’s post on removing a Texas trustee remain available.
The statute also protects the trustee’s routine paperwork. Absent clear and convincing evidence to the contrary, a directed trustee’s actions such as confirming that an advisor’s directions were carried out, and recording and reporting those actions, are presumed to be administrative. They are not treated as the trustee taking on a duty to monitor the advisor.
Questions Families Ask About Trust Protectors
Can a Trust Protector Change a Texas Trust?
Only as far as the trust allows. Section 114.0031(d) permits a trust to give a protector power to amend its terms for favorable tax status or more efficient administration, and the trust can grant other powers as well.
Can a Beneficiary Serve as the Trust Protector?
The statute does not prohibit it, but a protector who holds a power to appoint trustees and uses it to appoint itself loses the narrow nonfiduciary exception. That is one reason to consider someone independent of the beneficiaries.
Is the Trustee Liable for Following a Protector’s Direction?
Generally not, unless the trustee’s own conduct amounts to wilful misconduct.
Writing a Protector Into a Texas Trust
A protector clause works when the powers are specific and the successor protector is named, so the provision does not lapse with the first person chosen. McCulloch & Miller approaches these provisions through integrated legal, tax, and care planning, and the firm’s overview of types of trusts shows where a protector fits. To go through your situation with the firm, call (713) 333-8900 or send a message through the contact page. Flat fees are available for much of this work.