Traditionally, the three main parties to a trust were the Settlor, the Trustee and the Beneficiary(ies). The Settlor created the trust by transferring assets to the Trustee, who held those assets on behalf of the Beneficiaries.
However, in recent years, the appointment of a fourth party has become increasingly prevalent. This fourth party is the Trust Protector.
What is a Trust Protector?
A Trust Protector is often referred to as a trust 'supervisor' who monitors and oversees the trust and the activities of the Trustee.
It is important to note that the role of Protector is quite separate and distinct to the role of Trustee. The management and administration of the Trust is the sole preserve of the Trustee.
The Protector's primary objective is to ensure that the Trustee adheres to the provisions of the Trust Deed and acts in accordance with general trust law.
For more detail on Trusts, please visit our Irish Discretionary Trusts Resources page for all our related resources.
The Powers of a Trust Protector
The scope of the Protector's role is limited to the specific powers conferred by the terms of the relevant Trust Instrument.
The powers granted to the Protector should be carefully considered. As mentioned above, a Protector is not a Trustee. Care should be taken to ensure that the powers conferred are not so broad as to render the Protector a 'de facto' Trustee.
Powers conferred may include some of the following:
- To remove and replace the Trustee where the trustee is unable or unwilling to act, or, in extreme cases, as a means of safeguarding the trust from trustee abuse.
- To consent to / veto proposed distributions
- To approve/disapprove addition or removal of beneficiaries
- To support/withhold support to appointment of third party advisors to or agents of the Trust
- To permit a change of situs or governing law of the Trust
- To terminate or resettle the Trust
- To assist in the resolution of disputes arising between co-Trustees or between the Trustee and the Beneficiaries
- To appoint their own successor Protector
The Protector should be careful not to exceed the specific powers granted. In addition, and as already mentioned, the totality of the powers granted to the Protector should not be so broad as to render the Protector a "de facto" or a "constructive" trustee.
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Who can be a Trust Protector?
A Protector can be an individual, a committee, or a corporate entity.
Some Settlors opt to appoint a family member or friend, or a trusted advisor.
However, other Settlors opt to appoint professional Protectors. Professional Protectors may have a superior understanding of the role, and how that role complements the role of Trustee. Professional Protectors may also have the following advantages:-
- They tend to possess a greater understanding of general trust law
- They are experienced in the fulfilment of the role
- They may be better equipped to deal with complex or unusual issues arising
- They are objective and impartial, and therefore not susceptible to family pressures or biases.
- They are often regulated by supervisory authorities.
At Pearse Trust, we offer a comprehensive service as Trust Protectors. Through our expertise in corporate and trust structures, our service excellence allows us to build lasting partnerships with our clients, some of whom have been with us for over 35 years. Contact us today for further information.
Pearse Trust As Your Professional Trust Protector
While Pearse Trust offer a comprehensive service as Professional Trustee. We also provide our expertise as Trust Protectors. With over 35 years experience, we are ideally placed to ensure that your trust structure is managed in a fair and legal manner. To discover more about how you or your clients might benefit from a trust protector please download our Protector Services Whitepaper below.
Alternatively, you can contact via firstname.lastname@example.org for any queries you may have.