A Trust Protector is a third party entrusted to ensure compliance with the terms of a Trust, the wishes of its creator and the fulfilment of the Trustee. It is without a doubt a powerful tool that should always be considered when planning a Trust.
The fundamental reason for appointing a Trust Protector is to have an independent and objective professional who can monitor how the Trust’s assets are managed and distributed over time.
What can a Trust Protector do?
Their duties are specified in the Trust document and may vary significantly. Generally, the Protector may have functions related to the Trust, but not linked to the Trustee´s powers, and their powers may include:
- Replacing the Trustee whose compliance is unsatisfactory and name another one instead.
- Terminating the Trust.
- Changing the jurisdiction of the Trust.
- Resolving deadlocks or disagreements between Beneficiaries or between Beneficiaries and the Trustee.
- Vetoing investment decisions.
- Redirecting distributions from the Trust or amending the administrative provisions and terms of the Trust based on unforeseen circumstances in the lives of the Beneficiaries or changes in the law, being able to transfer the administration of the Trust to a different jurisdiction.
Trust Protectors can play an invaluable role. Many times, family members are the first natural choice, although it is very likely they lack the proper knowledge in the matter. A professional Trust Protector has the ability to ensure that the terms of the Trust and decision making are truly in the best interest of the beneficiary and in compliance of the wishes of the person who established the Trust.
In summary, the Professional Trust Protector is a good tool and necessary addition to the Trust to safeguard and monitor the Trustee´s activities. In this way it can help the interests of the beneficiary without being in the front line of daily decision making but informed and free from any direct link to the Trust or its assets.