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Protector Powers for Old Mutual’s trusts

This article aims to detail the powers and duties given to a protector under our Old Mutual International, Old Mutual International Trust Company, Old Mutual International Ireland and Old Mutual Wealth (UK)’s Trusts. It also explains how protectors can be added, changed or removed from the trusts.

Powers exercisable by the protector under our trusts

The following powers are exercisable by the protector:

Power to appoint trustees (applies to Absolute Trust, Discretionary Trust, Discretionary and Bare Discounted Gift Trusts, Discretionary and Bare Loan Trusts).

The power of appointing new trustees is exercisable by the following:

  • the protector (if any), or
  • if there is no protector able or willing to act, the settlor
  • if there is no protector or settlor, the remaining trustees
  • if there are no remaining trustees, the legal personal representatives of the last remaining trustee.

For these purposes the protector shall be deemed to be unable or unwilling to act if they fail to respond to a written request from the trustees within 30 days (or such longer period as may be specified under a notice given to the trustees if the protector feels 30 days is insufficient in the circumstances to respond).

Power to dismiss trustees (applies to Absolute Trust, Discretionary Trust, Discretionary and Bare Discounted Gift Trusts, Discretionary and Bare Loan Trusts).

The protector shall have the power to dismiss a trustee by giving 30 days' notice in writing to such trustee. The protector will not require the trustee’s consent to do this. Any person removed as trustee must ensure that any trust property with their name on the title documents is amended to reflect only the new and other current trustees as soon as practically possible. The removal cannot take effect unless and until there are at least two individual trustees or a corporate trustee remaining.

Powers and discretions under the terms of the trust which require the protector’s consent before they can be enacted by the trustees

The following powers and discretions, as described in our trust deeds, require the protector’s consent before they can be enacted.

Trustees’ release of powers (applies to Absolute Trust, Discretionary Trust, Discretionary and Bare Discounted Gift Trusts, Discretionary and Bare Loan Trusts).

With the written consent of the protector (if any), the trustees may by deed release wholly or in part any of their rights or functions.

Change of governing law (applies to Absolute Trust, Discretionary Trust, Discretionary and Bare Discounted Gift Trusts, Discretionary and Bare Loan Trusts).

By deed with the consent of the protector (if any) (or otherwise the settlor during their life or two beneficiaries after the settlor's death), the trustees may declare:

  • that the law of any qualifying jurisdiction governs the validity of the settlement, and its construction, effects and administration, or any severable aspect of the settlement; or
  • that the courts of any qualifying jurisdiction have exclusive jurisdiction in any proceedings involving rights or obligations under the settlement.

This means that the trustees, with the consent of the protector (if any), can change the law applicable to the trust, so that in the event of any disputes about the trust, ie how it is being administered, the laws of the new country will apply.

Trust income (applies to Discretionary Trust and Discretionary Loan Trust).

Subject to the prior written consent of the protector (if any), the trustees shall pay or apply part of the income of the trust fund to or for the benefit of any beneficiary, at the trustees’ discretion.

Residual fund trust income (applies to Discretionary Discounted Gift Trust)

Subject to the prior written consent of the protector (if any), the trustees shall pay or apply part of the income of the trust fund to or for the benefit of any beneficiary, at the trustees’ discretion.

Power of appointment (applies to Discretionary Trust and Discretionary Loan Trust)

Subject to the prior written consent of the protector (if any), the trustees shall appoint by deed either revocably or irrevocably that they shall hold the whole or any part of the trust fund for the benefit of any beneficiary on such terms as they think fit. Such appointment may create any provisions including discretionary trusts and dispositive and administrative powers exercisable by any person.

Power of appointment (applies to the residual fund within the Discretionary Discounted Gift Trust)

Subject to the prior written consent of the protector (if any), the trustees shall appoint by deed either revocably or irrevocably that they shall hold the whole or any part of the residual fund for the benefit of any beneficiary on such terms as they think fit. Such appointment may create any provisions including discretionary trusts and dispositive and administrative powers exercisable by any person.

Power of advancement (applies to Discretionary Trust and Discretionary Loan Trust).

Subject to the prior written consent of the protector (if any), the trustees shall pay or apply any trust property for the advancement or benefit of any beneficiary.

Power of advancement (applies to the residual fund within the Discretionary Discounted Gift Trust).

After the death of the settlor(s), subject to the prior written consent of the protector (if any) the trustees shall pay or apply any trust property for the advancement or benefit of any beneficiary.

Transfer of trust property to a new settlement (applies to Discretionary Trust and Discretionary Loan Trusts).

Subject to the prior written consent of the protector (if any), the trustees may by deed transfer trust property to the trustees of a new settlement (provided every person who may benefit is (or would if living or added be) also a beneficiary of the new settlement).

Transfer of trust property to a new settlement (applies to the residual fund within the Discretionary Discounted Gift Trust).

After the death of the settlor(s), subject to the prior written consent of the protector (if any) the trustees may by deed transfer trust property to the trustees of a new settlement (provided every person who may benefit is (or would if living or added be) also a beneficiary of the new settlement).

Use of trust property (applies to Discretionary Trust, Discretionary and Bare Loan Trusts).

With the written consent of the protector (if any), the trustees may acquire any interest in property for occupation or use by a beneficiary, permit a beneficiary to occupy or enjoy the use of trust property, lend trust money to a
beneficiary or charge trust property as security for any debts or obligations of a beneficiary.

Use of trust property (applies to the residual fund within the Discretionary Discounted Gift Trust)

After the death of the settlor(s), the trustees with the written consent of the protector (if any) may acquire any interest in property for occupation or use by a beneficiary, permit a beneficiary to occupy or enjoy the use of trust property, lend trust money to a beneficiary or charge trust property as security for any debts or obligations of a beneficiary.

When must notice be given to the protector under our trusts?

When a trustee wishes to retire (applies to Absolute Trust, Discretionary Trust, Discretionary and Bare Discounted Gift Trusts, Discretionary and Bare Loan Trusts).

Any trustee may retire at any time provided 30 days' written notice is given to the person who currently has the power to appoint new trustees (see Powers exercisable by the protector under our trusts above). The retirement cannot take effect unless and until there are at least two individual trustees or a corporate trustee remaining.

Appointing a protector under our trusts

At outset, a protector can be appointed by completing the protector details on the trust deed. At a later stage (assuming no protector was appointed at outset) whereby the settlor, or if there is no settlor in existence and capable of making an appointment, the trustees may in writing appoint any person (other than a trustee) to be the protector. Also the settlor can complete a letter of wishes, detailing who they would like the trustees to consider appointing after their death.

Can a successor protector be appointed under our trusts?

Yes, the protector may nominate a person in writing to succeed them should they cease to be the protector:

  • upon such cessation, if the nomination remains valid and the trustees have been given prior notice of the nomination, and
  • the person nominated consents in writing,

then such person will become the protector when the current protector ceases to be the protector.

If no such nomination occurs, the settlor (if any), or if there is no settlor capable of making an appointment, the trustees, may in writing appoint any person (other than a trustee) to be the protector. There is no duty to appoint a successor protector.

Draft deeds to allow protectors to exercise their powers under our trusts are available from the applicable Old Mutual Head Office on request.

Can a protector retire under our trusts?

Yes. If a protector wishes to retire, they may appoint in writing another person to be the protector. It is prudent (though not necessary) that a successor protector is appointed in their place and:

  • when the trustees have been given written notice of the appointment; and
  • the person appointed consents in writing

then such person shall immediately become the new protector in place of the retiring protector and any nomination (if any, to appoint a successor protector) shall be revoked.

Can a protector be removed under our trusts?

Yes. The protector shall cease to be the protector:

  • if an individual, on death; or
  • if a corporation, on dissolution; or

in either case, on becoming unable or unfit to act or by making a valid appointment, i.e. by successfully appointing a replacement protector.

The information provided in this article is not intended to offer advice.

It is based on Old Mutual Wealth's interpretation of the relevant law and is correct at the date shown at the top of this article. While we believe this interpretation to be correct, we cannot guarantee it. Old Mutual Wealth cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.

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