User:Kclerey/Trust Protector Services

Trust Protector Services

The Trust Protector

Protectors are featuring increasingly in modern estate planning and in the terms of discretionary trusts. A Protector is a person, or a group of persons, deployed under the terms of a discretionary trust deed to oversee the actions of the trustees. His role is to ensure the terms of the trust are complied with and thereby to protect the interests of the trust's settlor and its beneficiaries. The trust deed, or a supplementary deed to a trust, will nominate the Protector and will define the powers bestowed upon him. These powers will grant the Protector a measure of control over certain actions carried out by the trustees and such powers will tend to be veto powers by nature, but not necessarily so. Therefore, the trustees in most circulmstances will be required to obtain the protector’s consent before exercising certain powers, but in other respects the trustees may act only in accordance with directions given to them by the Protector.

The trust itself can trace its history back to the Middle Ages, but for many centuries, as trusts evolved and spread around the English speaking world, the Protector remained an almost unknown concept. Even today, in the many trust laws enacted around the globe, there are very few statutory references to the roles and responsibilities of Protectors and consequently it is up to the trust deed and the parties to the trust to stipulate what these will be.

Due to today's increasingly complicated legal and tax environment and the need for complying with a multitude of domestic and cross border regulations faced by all those party to a trust and it is becoming increasing common, and indeed necessary, for a specialist firm be appointed as the Protector of an international discretionary trust and to carry out the trust protector services.

Features and Benefits

• Enables the settlor to withhold certain powers from the trustees
• Provides comfort to settlors and founders where there is concern that the trustees may not consider the wishes of the settlor sufficiently closely
• Assures settlors that after their deaths the affairs of the trusts and the interests of the beneficiaries will be overseen
• Provides useful guidance in times of change and during unexpected events (e.g. mental or physical incapacity, divorce, imposition of taxation or new laws, claims from illegitimate heirs)
• Ability to resolve disagreements between trustees and beneficiaries

Examples of powers where the trustees must first obtain consent of the Protector

• Protectors can be granted negative or positive powers (or both) – i.e. where the protector’s consent is required or where the protector can give instructions
• Approving the addition and removal of beneficiaries
• Approving proposed trust distributions to beneficiaries
• Amending the terms of the trust instrument
• Approving a change in the law governing the trust
• Terminating or approving the termination of the trust

Powers a Protector can exercise without reference to the trustees

• Appointing replacement protectors
• Removing and appointing new trustees

Other activities which commonly involve the Protector

• Participating or overseeing investment review committees
• Approving the appointment of agents or professional persons
• Overseeing or approving trustees remuneration
• Reviewing and safekeeping copies of official trust documents

Professional Protector Services

• Carrying out the role of protector as prescribed in the trust deed
• Providing consent or otherwise to actions proposed by trustees
• Performing periodic reviews of trust activities
• Reviewing financial statements and other trustee documentation
• Attending trustee meetings and reporting to settlors and beneficiaries
• Becoming successor protectors to existing structures
• Advising other Protectors on the execution of their duties
• Acting as an authorised applicant or as an enforcer to purpose trusts

External links

• http://www.bfsb-bahamas.com/res-legislation.php]
• http://www.ipg-protector.com/articles.php