Parties of the Trust: The Protector
Posted: Wed Feb 19, 2025 10:32 am
The Trust Fund can be apportioned into a main fund and sub fund elements, ringfenced for certain Beneficiaries. in practical terms, sub funds are created for the Beneficiaries or categories of Beneficiaries which only they can benefit from.
Should the Settlor wish to amend the list of Beneficiaries or categories, depending on the type of Trust, they can make a Deed of Variation. In the instance of a Discretionary Trust, the settlor would supply an updated letter of wishes to the Trustees – remember this document is not binding upon the Trustees and is only persuasive – Depending on the powers conveyed upon the Trustees, they will then consider the actions required.
The nature of the Trust will define the rights which the Beneficiary may seek to enforce. malaysia mobile database For example Discretionary Trusts, which are now regularly used in modern Estate Planning or Succession Planning due to their flexibility. Such Trusts convey few rights upon the Beneficiary, as the management and distribution of the Trust property is at the Trustees’ discretion. However, both Settlor and Beneficiary can take comfort in these circumstances from the Trustees fiduciary duties; whereby the assets must be managed in the best interests of the Beneficiaries.
Whilst not a mandatory requirement, the Settlor may choose to appoint a Protector from outset. The Protector of a Trust is an independent party who is not a Trustee, but is given powers under the Trust Deed. The Protector ensures the Trustees are administering the Trust in compliance with the Trust Deed and the Settlor’s wishes.
Typically the Protector will be a trusted and qualified professional, who may already have a relationship with the Settlor or their family, such as a Solicitor or Financial Adviser.
Should the Settlor wish to amend the list of Beneficiaries or categories, depending on the type of Trust, they can make a Deed of Variation. In the instance of a Discretionary Trust, the settlor would supply an updated letter of wishes to the Trustees – remember this document is not binding upon the Trustees and is only persuasive – Depending on the powers conveyed upon the Trustees, they will then consider the actions required.
The nature of the Trust will define the rights which the Beneficiary may seek to enforce. malaysia mobile database For example Discretionary Trusts, which are now regularly used in modern Estate Planning or Succession Planning due to their flexibility. Such Trusts convey few rights upon the Beneficiary, as the management and distribution of the Trust property is at the Trustees’ discretion. However, both Settlor and Beneficiary can take comfort in these circumstances from the Trustees fiduciary duties; whereby the assets must be managed in the best interests of the Beneficiaries.
Whilst not a mandatory requirement, the Settlor may choose to appoint a Protector from outset. The Protector of a Trust is an independent party who is not a Trustee, but is given powers under the Trust Deed. The Protector ensures the Trustees are administering the Trust in compliance with the Trust Deed and the Settlor’s wishes.
Typically the Protector will be a trusted and qualified professional, who may already have a relationship with the Settlor or their family, such as a Solicitor or Financial Adviser.