Protectors Flashcards
Q1: Is a protector essential for a valid trust under Jersey law?
A1: No. A protector is not required for a trust to be valid. There is no settled definition of what a protector is or must do.
Q2: How is a protector generally defined in trust law?
A2: A protector is someone who, under the terms of a trust, is given powers affecting the trust property, the terms of the trust, or the trustees/beneficiaries.
Q3: Are protectors defined in detail under the 1984 Law?
A3: No. Unlike some offshore jurisdictions, Jersey law has only limited statutory provisions regarding protectors.
Q4: What is the difference between positive and negative powers of a protector?
A4: Positive powers (e.g., appointing income/capital) are often given to an “appointor.” Negative powers involve veto or consent rights, like consenting to trustee decisions.
Q5: What does Article 24(3)–(4) of the 1984 Law say about protectors?
A5: It allows trust terms to require trustee consent from another person (like a protector) and confirms such a person is not a trustee by default.
Q6: Does a protector automatically have standing to apply under Art 51?
A6: No. A protector must seek the Court’s permission to make an application under Article 51.
Q7: Do protectors owe fiduciary duties?
A7: Yes. Case law (e.g., Re Internine Trust, Re the Bird Charitable Trust) confirms protectors owe fiduciary duties to beneficiaries and must act in their best interests.
Q8: What happens if a protector has a conflict of interest?
A8: The protector must disclose it to the trustee and beneficiaries. If it can’t be managed, they should resign.
Q9: Can the Court remove a protector?
A9: Yes. If their continued presence is detrimental to the trust’s execution, the Court may remove them (see In the Matter of the A Trust).
Q10: Are protectors entitled to payment?
A10: They may be reimbursed for expenses, but there’s no statutory right to remuneration under the 1984 Law—though the Court may allow it under its inherent jurisdiction.
Q11: How should a protector approach a decision requiring their consent?
A11: In Jersey law (e.g. Piedmont Trust), the protector must form their own view—not merely assess whether the trustee acted reasonably.
Q12: What did the Piedmont Trust case say about protector roles?
A12: The protector must decide independently whether the trustee’s proposal is in beneficiaries’ best interests, not just review it like a court blessing.
Q13: How did Jersey law diverge from Bermudian law in this area?
A13: Jersey rejected the Bermudian ‘watchdog’ model and held that the protector has a separate decision to make—though not as a co-trustee.
Q14: What is the legal role of an enforcer?
A14: To enforce a non-charitable purpose trust under Article 13 of the 1984 Law.
Q15: Can a trustee also be an enforcer?
A15: No. A person cannot be both enforcer and trustee of the same trust.
Q16: Does the 1984 Law define the enforcer’s duties?
A16: Yes. The enforcer must enforce the trust in relation to its non-charitable purposes.
Q17: Does the 1984 Law define ‘investment manager’?
A17: No. The term appears in Article 25(2), but is not defined. Trustees may delegate investment powers under Articles 24 and 25.
Q18: Who does an investment adviser owe duties to?
A18: To the trustee—not to the beneficiaries directly. The trustee is responsible for monitoring advisers.
Q19: Can the settlor be appointed as investment adviser?
A19: Yes, and often is, especially if the settlor is a skilled businessperson. The appointment must not allow self-dealing.
Q20: What was decided in Vestey’s Executors v IRC regarding settlors as investment advisers?
A20: The court held such advisers have fiduciary duties to beneficiaries and cannot profit at their expense.
