Can I appoint a Protector for my Testamentary Trust?
Yes, you can. However, appointing a Protector (also referred to as the Guardian of the Trust) is less common in the case of a testamentary trust managed by a loved one. A Protector is typically appointed by the settlor to oversee or monitor the trustee’s actions and may be granted certain powers, such as the authority to replace the trustee. Unlike a trustee, the Protector generally does not manage the trust assets or hold the same fiduciary duties.
In some cases involving a living or standby trust, a Protector may be appointed to “watch over” the licensed trust company. However, in the case of a testamentary trust, it often makes more sense to appoint that individual as the trustee instead, as they can always engage a trust company in the future if needed.
Regardless, if you still wish to include a Protector in addition to a Trustee, you will need to clearly define the appointment, any substitutes (if applicable), the role and responsibilities of the Protector, the terms of the appointment, and the powers granted to the Protector. These can be included under Additional Trust Instructions within the Testamentary Trust.
Here's an example you can use:
Appointment of Protector
I appoint my {Relationship}, {Name}, {Identification Number/details}, to act as the protector (the "Protector") of My Testamentary Trust – {Name of Testamentary Trust}.
[OPTIONAL] Should the Protector die before me, is unable or unwilling to serve or continue to serve, I appoint the following personnel as substitutes in order of priority to replace him/her as the Protector of My Testamentary Trust – {Name of Testamentary Trust}.
(a) {Relationship}, {Name}, {Identification Number/details};
(b) {Relationship}, {Name}, {Identification Number/details};
...
The Protector may, in writing (with written notice given to the Trustee) and on such terms as specified by the Protector, appoint a successor to become the Protector upon his/her ceasing to be the Protector. This appointment by the existing Protector takes priority over any aforementioned substitute(s), if applicable.
A person ceases to be the Protector in the event of:
- Death; or
- Resignation by written notice to the Trustee; or
- Refusal, unfitness or incapacity to act.
If at any time there is no Protector able and willing to act, the Trustee shall appoint a new Protector.
The Protector shall not be appointed Trustee in this testamentary trust. A Trustee shall not be appointed Protector in this testamentary trust.
There shall only be one Protector at any one time.
The Protector shall have the following duties and powers:
- The powers of the Protector are fiduciary in nature.
- The Protector is under no duty to enquire into or interfere with the management or conduct of this testamentary trust unless he/she has actual knowledge of circumstances which call for enquiry.
- The Protector has the same rights as any beneficiaries in this testamentary trust to receive information concerning this testamentary trust and its administration from the Trustee and to inspect and take copies of trust documents.
- The Protector shall have the power to remove or appoint Trustee of this testamentary trust. The Protector may exercise this power for any reason, including but not limited to the Trustee's incapacity, death, resignation, or failure to fulfil their duties.
- The Protector shall have the power to modify or amend the terms of the trusts, including to veto or approve any proposed distributions from this testamentary trust. The Protector may exercise this power to accommodate changes in circumstances or to better achieve my intentions for this testamentary trust.
- The Protector shall have the power to resolve disputes that may arise among the Trustee, beneficiaries, or any other parties involved in this testamentary trust. The Protector may mediate, make binding decisions, or seek legal remedies as necessary to ensure the proper administration of this testamentary trust.
- The Protector shall consider the appropriateness of any act before exercising his/her powers.
