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Provision of protector

Protector

It is possible for a protector to be appointed who exercises some degree of control over the trust property. In our opinion, it is unwise for the protector to be given anything other than negative powers as this may mean that the protector is considered to be a quasi-trustee and negative consequences may result especially when the protector is resident in a high tax country. Thus, for example, the protector's powers should be limited to vetoing the decisions or actions of the trustees rather than having power to force the trustees to act in any particular way. For example, the trust deed may stipulate that no distribution from the trust can be made by the trustees without the consent of the protector but the trust deed should not give the protector power to instruct or force the trustees to make a distribution. The need for the protector to be consulted are structured without a protector being appointed. It is usual for a trusted friend, family relative or professional adviser of the settlor to be appointed as the protector but it is becoming increasingly common to use the services of a professional trust company to act as protector. For this reason our own organisation offers to act as a professional protector where we are not retained to act as trustees.