Appoint a Bodyguard to look after your Trust

When a trust is established the legal ownership of the assets and therefore control passes to the trustees, and for some this loss of control may cause the jitters and impact upon the decision to act - notwithstanding that as a settler they are one of the trustees.

Appointing a Bodyguard or more correctly a Protector may be the answer.

The idea being the employment of a protector is to provide the settler with an additional element of control over the trust and its assets.

The protector is not a trustee, but in practice the person appointed will normally also be a trustee. The protector oversees the activities of the trustees and their primary role is to ensure that the trustees are aware of the requirements of the beneficiaries.

The protector will also usually have the power to appoint and remove trustees which could be advantageous if trustees fall out with eah other.

It’s good practice for the first protector to appoint a successor protector on establishing the trust, so either upon the death or incapacity of the current protector a second protector can take over the role and the responsibilities.

In appointing a successor protector at outset the settler/protector can keep a degree of control of the trust beyond the grave by selecting a person who will have the power to change the trustees and who must give consent before beneficiaries are changed or capital is appointed to a beneficiary.

Consider the following example: Sam establishes a discretionary trust. He appoints himself and his second wife as trustees with the potential beneficiaries including his adult children from his first marriage. Sam wants to ensure during his lifetime and beyond that he has some control over what appointments are made to the children from his first marriage, and therefore appoints himself as a protector at outset. He also executes a deed appointing his eldest son from his first marriage, who he trusts to act impartially, to act as protector on his death.

By doing this Sam has put in place additional controls and security that gives him peace of mind and greater confidence to go ahead and implement the trust.