Acknowledgements
About the Author
About the Book
Chapter 1 The Protector: Friend, Foe or Fiduciary?
1.1 Beginnings
1.2 The First United States Case
Chapter 2 Development of the Position of the Trust Protector
2.1 The Trust without the Protector
2.2 Origin of the Term, "Protector," and Its Initial Role
2.3 Origin of the Concept of Protector and the Relevance of the Name-tag
Chapter 3 The Protector as Fiduciary
3.1 Analyzing the Role and Its Responsibilities
3.2 Personal versus Fiduciary Power and Statutory Dictates
3.3 Legal Forms Follow the Pack
3.4 Courts Begin to Consider the Role
3.5 When a Personal Power Is Intended
3.6 Fiduciary Power and Fiduciary Duty
3.7 Fiduciary Power versus Fiduciary Position
3.8 Fiduciary by Virtue of Profession or Identity
3.9 Fiduciary by Circumstances
3.10 A Court's Analysis of Powers
3.11 The Settlor's Intent Should Control
3.12 Trust Language Contradicting the Settlor's Intent
3.13 Where the Trust Is Silent
3.14 Drafting Away Fiduciary Duty
3.15 Statutory Elimination of Fiduciary Duty
3.16 The Office of Protector versus the Individual
3.17 Stating the Obvious: The Protector Is a Fiduciary
Chapter 4 Powers of the Protector
4.1 Reasons for Powers
4.2 How Powerful Can/Should the Protector Be?
4.3 Illegal and Impermissible Powers
4.4 Are More Powers Better?
4.5 Deciding on Greater or Fewer Powers
4.6 Implied Powers
4.7 Statutory Powers
4.8 How the Powers Are Exercised
4.9 Multiple Protectors
4.10 Entity Protectors
4.11 Delegation of Powers
4.12 Release of Powers and Effect on Successors
Chapter 5 Duties of the Protector
5.1 Duty under a Personal Power
5.2 Duties of Protector as Beneficiary
5.3 Protector's Duty to Monitor the Trustee
5.4 Manner of Duty and Discretion
5.5 Duty Not to Give Pre-arranged Consent
5.6 Duty of Protector with a Conflict of Interest
Chapter 6 Protector's Liability
6.1 Establishment of Protector's Liability
6.2 Identifying the Specific Liability
6.3 Liability of the Protector versus That of the Trustee
6.4 Determining the Extent of Liability
6.5 Exculpating the Protector
Chapter 7 Rights of the Protector
7.1 Protector's Rights in General
7.2 The Right to Information -- Protector with a Personal Power
7.3 The Right to Information -- Protector with a Fiduciary Power
7.4 The Right to Enforce Claims and Trust Provisions on Behalf of the Trust and the Beneficiaries
7.5 The Right to Indemnification
7.6 Protector's Lien for Expenses
7.7 The Right to Compensation
Chapter 8 The Relationship between the Protector and the Trustee
8.1 Who's in Charge?
8.2 Is the Trustee Bound to Follow the Protector's Instructions?
8.3 Status of the Trustee in Relation to the Protector
8.4 Where the Powers of the Protector and the Trustee Overlap
8.5 United States Trust Law and Third-Party Advisors
8.6 Statutory Exculpation of Trustees Following Advisor's Direction
8.7 "Directed" Trusts
8.7.1 Directed Trustee Has No Duty to Inform the Protector
8.7.2 Establishing a Directed Trustee's Breach -- A Near Impossible Burden of Proof for the
Beneficiaries
8.7.3 Directions outside the Scope of Protector's Authority
8.7.4 Where the Trustee Should Have Known of a Breach by the Protector
8.8 The Uncertainty of the Uniform Trust Code
8.9 Trustee's Inherent Obligation to Inquire
8.10 Protector's Duty to Inquire and Monitor
8.11 Consider the Purpose of the Grant of the Power
8.12 One United States Case -- No Duty to Inquire
8.13 Veto Power
8.13.1 Protector's Veto Powers
8.13.2 Trustee's Disagreement with Veto
8.14 Having Integrity Rule
Chapter 9 The Courts' Role and Jurisdiction over the Protector
9.1 Development of the Law through Precedent
9.2 The Court's Inherent Jurisdiction over the Protector as a Fiduciary
9.3 Jurisdiction Where the Protector Is Not a Fiduciary
9.4 Where the Non-fiduciary Protector Is Found to Be a Fiduciary
9.5 Court's Recognition of Statutory Declarations
9.6 Where the Protector Is a Fiduciary
9.7 Court's Power to Appoint and Remove a Protector
9.8 Court's Power to Review Appointment of a Protector
9.9 Court's Power to Override a Protector's Decision or Exercise of Power
9.10 Court's Power to Suspend Protector's Powers
9.11 Court's Power to Surcharge the Protector
9.12 Court's Power to Compel the Exercise of a Protector's Power
9.13 Confidence through Court Predictability
Chapter 10 Practical Issues in Using Protectors
10.1 Reasoning behind the Role
10.2 Issues in Selecting and Utilizing a Protector
10.3 Protector in a Foundation
10.3.1 Reasons for Including a Protector in a Foundation
10.3.2 The Foundation and Fiduciary Duty
10.4 Tax Considerations for the Foundation
10.5 Protector in a Purpose Trust
10.6 Protector in a Revocable Trust
10.7 Selecting a Protector
10.7.1 General Criteria to Be Considered
10.7.2 Specific Criteria to Apply in the Selection
10.7.2.1 Experience in the area of Trusts/foundations
10.7.2.2 Insurance coverage for damages or losses
10.7.2.3 Adequate staff
10.7.2.4 Response time to address issues
10.7.2.5 Regulated
10.7.2.6 Location (where asset protection is an objective)
10.8 Individual versus Committee versus Entity as Protector
10.8.1 Individuals
10.8.2 Committee
10.8.3 Corporation and Limited Liability Company
10.9 Drafting Considerations
10.9.1 The Fiduciary Issue
10.9.2 The Compensation Issue
10.9.3 Hiring Agents and Attorneys
10.9.4 Right to Defend Claims against Himself
10.9.5 Enumeration of Specific Powers
10.9.5.1 Power to remove and replace the Trustee
10.9.5.2 Power to enforce claims
10.9.5.3 Right to reimbursement
10.9.5.4 Right to information
10.9.5.5 Power to amend the Trust
10.9.5.6 Power to add or delete Beneficiaries
10.9.5.7 Power to decant
10.9.5.8 The new "flee" clause
10.9.5.9 Change of situs and governing law
10.9.5.10 Power to terminate the Trust
10.9.5.11 Power to consent or veto
10.9.5.12 Tax restrictions
10.9.5.13 Vacancies, Successors
10.9.5.14 Excluded Protectors
10.9.5.15 Resignation
10.9.5.16 Incapacity, insolvency, disappearance
10.9.5.17 Perpetuities
10.9.5.18 Standards of Protector liability
10.9.5.19 Incorporating powers by reference
10.9.5.20 Anti-duress provision
10.10 Letter of Wishes
10.10.1 A Guide for the Trustee
10.10.2 Letter of Wishes to the Protector
10.10.3 Revealing the Settlor's State of Mind
10.10.4 Letter Should Be Non-binding
10.11 Use of the Protector in Asset Protection Plans
10.11.1 The Value of Flexibility
10.11.2 The Protector and Asset Protection Trusts
10.11.3 Special Drafting Considerations for Asset Protection Plans
10.12 The Springing Protector
10.12.1 Assessing Need and Cost
10.12.2 Employing a Springing Protector
10.13 Tax Considerations for the Protector
10.13.1 U.S. Tax Considerations in Selecting a Protector
10.13.2 Independent Protector
10.13.3 Protectors (Other than the Settlor) Who Are Beneficiaries
10.13.4 The Settlor as Protector
10.13.5 Powers that Generally Do Not Have Tax Consequences for an Interested Protector.
10.13.6 Powers that Generally Do or May Have Tax Consequences for the Interested Protector Other than the Settlor.
10.13.7 Tax Consequences of Non-Fiduciary Protectors
10.14 Court's Reaction to the Protector
10.14.1 Slow but Steady Acceptance by the Common Law Courts
10.14.2 Reluctant, Questionable Acceptance by United States Courts
10.15 Statutory Treatment of the Protector
10.15.1 Background and Development
10.15.2 Practical Issues concerning the Statutes
Chapter 11 The Future of the Protector
APPENDIX CONTENTS
Appendix I Selected Protector Statutes -- United States
Appendix II Selected Protector Statutes -- International Jurisdictions
Appendix III Trust Protector Forms
III. - A. Master Protector Provision for Inclusion of a Protector
Form III - A The Protector
III. - B. Removal of Trustee and Appointment of Successor
Form III - B Trustee Removal and Appointment of Successor Trustee
III. - C. Removal of Protector and Appointment of Successor Protector
Form III - C Removal of Protector and Appointment of Successor
III. - D. Notice to Beneficiaries, Trustee or Protector
Form III - D - i A.) Notice to Beneficiary - Change of Protector
Form III - D - i B.) Notice to Beneficiaries - Change of Situs
III. - E. Appointment of a Springing Protector
Form III - E Appointment of a Springing Protector
III. - F. Appointment of a Protector Committee
Form III - F Appointment of a Protector Committee
III. - G. Protector's Exercise of Various Powers
III. - G. - i. DIRECTING A DISTRIBUTION
Form III - G - i Directing a Distribution
III. - G. - ii. ADDING OR DELETING BENEFICIARIES
Form III - G - ii A.) Addition of a Beneficiary
Form III - G - ii B.) Deletion of a Beneficiary
III. - G. - iii. EXERCISING THE "FLEE" CLAUSE (POWER OF APPOINTMENT)
Form III - G - iii Appointment of Trust Assets
III. - G. - iv. GRANT OF POWER OF APPOINTMENT
Form III - G - iv Grant of Power of Appointment
III. - G. - v. ENGAGING AN AGENT OR COUNSEL - NOTICE TO TRUSTEE
Form III - G - v Engagement of Counsel
III. - G. - vi. CHANGING SITUS AND GOVERNING LAW
Form III - G - vi Change of Situs and Governing Law
III. - G. - vii. PROTECTOR'S LETTER TO BENEFICIARIES REGARDING MONITORING
OF TRUSTEE
Form III - G - vii Monitoring the Trustee
III. - H. Protector's Protection
Form III - H Release and Indemnification of Protector
Table of Abbreviations
Table of Cited Sources
Table of Cases
INDEX
