A trust protector is an independent third party with the authority to perform certain duties concerning a trust. These powers are limited to specific powers, usually to veto certain trustee decisions. The trust agreement typically details the trust protector’s responsibilities and areas of authority.
The veto power may include:
There is no legal requirement to appoint a protector when creating a trust, and indeed many trusts do not have protectors. It is very much up to the settlor to decide whether he wishes to have one.
Who could be a Protector?
The settlor of the trust will appoint the protector and this is usually a family friend or trusted advisor who would likely act impartially in the event of a family dispute, whether among the beneficiaries or between the trustee and a beneficiary.
The settlor can also stipulate successive protectors within the trust deed in the event of a protector passing away or stepping down.
It would be unlikely to appoint the trustee as protector as the role should be independent, albeit there is no legal restriction on this.
Pitfalls of Protector
Consideration and care should be taken to ensure that the powers conferred on a protector are not so broad as to deem the protector as a ‘de facto’ Trustee. Individuals who are requested to take on the position of protector should always consider the amount of powers conferred on them and consider whether professional advice is required in their country of residency.
Get in touch
If you’d like to learn more about how Atla Group can help you, please get in touch with Laura Pover (laura.pover@atla.im) or Martin Hall (martin.hall@atla.im) who will be able to assist.
Atla Fiduciaries Limited is licensed by the Isle of Man Financial Services Authority and is a limited company registered in the Isle of Man with registered number 029711C. The registered office of Atla Fiduciaries Limited is Burleigh Manor, Peel Road, Douglas, Isle of Man, IM1 5EP. This company forms part of the Atla Group.
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