Protector Services

Definition of Protector’s role

Protectors are increasingly a feature of modern discretionary trusts. As the title indicates, the protector is supposed to provide general oversight of the trust operations to ensure that the trust’s objectives are met, the law is followed, and all parties rights are protected.

There is no statutory definition of a protector – the function of a protector and his duties and responsibilities are essentially whatever the trust deed provides.

In summary, a protector is a person who retains a measure of control, typically a veto, over certain actions of the trustees, and may even have the power to remove them. Those powers will normally be set out in the trust deed.

Who benefits from the actions of the Protector?

The role of the protector is designed to protect the interests of the trust settlor, beneficiaries and trustees.

Powers & Duties of the Protector

The powers and duties of a protector may vary from case to case. In all cases, the trust deed would detail the powers granted to the protector.

The trust deed may require the trustees to act in accordance with directions given by the protector, or to obtain the protector’s consent before exercising certain of their powers, such as:

  • Adding or removing beneficiaries           
  • Appointing investment managers
  • Declaring an early termination date
  • Distribution of income and capital in favour of any beneficiary
  • Power to change the proper Law of the Trust
  • Restricting or releasing of powers during the Trust Period
  • Making loans to Beneficiaries
  • Permitting occupation of trust real estate by beneficiaries
  • Engaging in trading activities
  • Guaranteeing debts
  • Appointing of new protector
  • Power to remove and appoint new or additional trustees

Identity of the Protector

The protector should be familiar with the circumstances and needs of the beneficiaries, the family background and dynamics, and the wishes of the settlor.

Due to the increasingly complex multi-national legal, tax and compliance environment faced by trusts and the people associated with them, and also due to the uncertainties that life brings, it is commonly held that a professional corporation specializing in this field be appointed as a protector of an offshore discretionary trust.

Israel as a perfect jurisdiction for Protector of offshore trust

The Israeli Tax Authorities are in the process of legislating taxation of trusts as part of their overall tax reforms. However, these new laws are specifically user-friendly towards Israeli resident trustees and protectors. Thus, no undesired tax effects will accrue against the offshore trust as a result of the trustee or protector of an offshore trust being located in Israel. This is in stark contrast with the situation in the US, UK and other jurisdictions such as South Africa and Australia.

Anglo Capital Protector Services Limited

Anglo Capital Protector Services Limited is a company registered in Israel. It specialises in providing specialist Protector services for offshore trusts.

 

"Modern Role and Benefits of a Protector", by Peter Hodson, Hodson & Company, St Martins, Guernsey. Click here.