Trust Protector Services

The need for an independent fiduciary to fulfil the Trust Protector role in high value trust structures has never been greater. We are still in the very early stages of what is widely predicted to be a two-decade period of massive inter-generational wealth transmission, very often with cross-border elements, and with trusts very often playing a hugely important part in the wealth transmission process.

Trust litigation activity is soaring globally, usually following the death of the Settlor which is very often the catalyst for any aggrieved beneficiaries to challenge and attack the provisions of a trust. This is more prevalent where the deceased Settlor has ex-spouses, children from different marriages or where there is a family business owned by a trust but where only some of the trust beneficiaries work for the family business, but there are many other circumstances which create tensions within trusts. Trust deeds drafted several decades ago have very often not been updated to pre-empt or withstand the types of such challenges and attacks.

Very often, the role of Trust Protector has been filled by a friend or relative during the Settlor’s lifetime, but after the Settlor’s death that role can very quickly become one which the friend of relative is reluctant to hold, mindful of the litigation factor, and also due to the adoption of the Common Reporting Standard which results in the Trust Protector being a reportable person.

There is, as a result, a growing recognition that appointing a very experienced trust professional who is tax-resident in a suitably tax-benign jurisdiction as a totally independent Trust Protector, with no connection to the trust service provider, can often be the optimum solution.