The protector may also be
appointed to act as a central point of liaison between the
beneficiaries and the trustees and to resolve any disputes which
may arise from time to time.
The protector does not have the
same powers as the trustee, for example, the legal ownership of
the trust property is held by the trustee who is responsible for
the management and control of the trust and its property. The
protector, however, is not the registered or legal owner of the
trust property and would not be involved with the day to day
administration of the Trust. He will have to fulfil certain
duties and responsibilities and will also be given certain
powers under the terms of the trust deed.
Reasons why a protector may
be required
The settlor may be concerned that the trustee will fail to
exercise his powers and duties in a satisfactory manner and
would like a third party to keep watch over the trustee's
actions.
He may be concerned that the
trustee may not pay attention to his wishes.
He would like certain powers to
be withheld from the trustees;
He would like a third party to
act as moderator, and the main point of contact, between the
beneficiaries and the trustees.
Usual powers of the trust
protector
The trust deed must specify what powers the protector will
have as there are generally no statutory powers which will be
available in default.
i) To remove and appoint the
trustees;
ii) To approve a change of
proper law;
iii) To approve to the addition
or removal of beneficiaries;
iv) To approve proposed trust
distributions;
v) To approve the appointment of
an agent or adviser;
vi) To approve investment
recommendations;
vii) To appoint replacement
protectors;
viii) To approve a proposal to
terminate the trust;
Fiduciary Powers
Firstly, a 'fiduciary power' is generally accepted to be one
which has been conferred on a person for the benefit of others.
Clearly, if the protector has powers which enable him to affect
the interests of the beneficiaries (i.e. the power to approve
trust distributions) then he will have fiduciary powers and
will, as a result, be expected to fulfil the duties which are
expected of those with such powers.
