Who is a Trust Protector?

A Trust Protector is a third party who has been entrusted with the task of enforcing the terms of a Trust. He will be in charge of making sure that the wishes of its creator are fulfilled, as well as taking care of the good functioning of the Trustee. It is undoubtedly 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 or trusted person 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 in case of non-compliance or unsatisfactory compliance, and name another one instead.
• Terminating the Trust.
• Continuing the Trust after the death of the Settlor.
• 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.

Who can serve as a Fiduciary Protector?

Many times, family members are the natural first choice, however, they may not have adequate knowledge of the subject and a Professional Trust Protector can be a good alternative.

A Professional Trust Protector can be either a person or an entity that has the professional and legal capacity to ensure that the terms of the Trust and the decision making are truly in the best interest of the beneficiaries and respectful of the wishes of the Trust’s settlor.

Protectors can play an invaluable role. When setting up a Trust, consider the advantages of appointing a Protector and especially the alternatives in Protector Services that exist.

Making the right decisions when creating a Trust will make it easier for your successors to understand and then fulfill each and all of your wishes.

By Florencia Ribes.