Settlors establishing discretionary trusts often appoint a
protector as a safeguard against errant trustees.
But who guards the guard if, after the settlor's death and
disregarding evolving circumstances of the trust, a protector
rigidly adheres to a (misconceived) view of his role as living
enforcer of the settlor's wishes, leading to an irretrievable
breakdown in relations with the beneficiaries?
Those were just the circumstances Jersey's Royal Court found
existed with two discretionary trusts the subject of a recent
beneficiary application (In the Matter of the A Trust 
The Judgment addresses (1) principles the Jersey courts will
apply in deciding whether to remove a protector; (2) a
protector's duty as regards the settlor's expression of
wishes for the trust.
The Court held that its inherent jurisdiction to remove a
protector was akin to that it had to remove trustees, and flowed
from the fiduciary nature of the protector's office.
The Court emphasised that it would not exercise that
jurisdiction lightly. However, it would if necessary for the
welfare of the beneficiaries and ensuring competent administration
of the trust.
The existence of friction/hostility between protector and
beneficiaries of itself was not enough to justify removing a
protector. However, removal was justified if the hostility is
grounded on the mode in which the trust has been administered, and
if the protector continuing in office would be detrimental to the
execution of the trusts.
The Court acknowledged that removal of protectors by the Jersey
courts on previous occasions had arisen from exceptional
circumstances, but did not accept that such circumstances defined
the limits within which the Court's jurisdiction could properly
In explaining its decision to remove the protector, the Court
identified that he had been much of the cause of the breakdown of
relations and resulting hostility, which was likely to continue
into the foreseeable future. The court also identified the
Protector's reluctance to recognise the potential jeopardy to
the trusts created by his overzealous involvement, as well as his
lack of proper oversight of the trust's administration (citing
failure to question the bank-owned trustee's decision to leave
substantial proceeds of liquidated asset on deposit within its own
The Court ruled that, as with a trustee, a protector's
over-arching duty is to the beneficiaries. A protector's duty
as regards a settlor's letter of wishes can be no more than the
trustee's, that is, to have due regard to such matters without
any obligation to follow them. It followed then that a
protector's duty can be no higher than to do his best to see
that trustees have due regard to the settlor's wishes.
Protectors often play an integral part of a trust's
administration, so this judgment provides useful guidance as to the
grounds for removal if relations with a protector turn sour. Also
in relation to the protector's role as proponent of the
settlor's wishes, reemphasising the primacy of the
protector's duty to the beneficiaries.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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