Removing a Protector of a Trust

I am dealing with a Trust whereby there is a Protector appointed. The Trustees are now wishing to wind up the Trust but to do so will require the Protector to be a party to the Deed of Appointment. The Protector however has since fallen out with those involved and is not contactable. The Trust includes an order of priority stating “the following persons shall be appointed as Protector in the following priority…”, however as the first named Protector has not died we are unsure how to remove him. The Trust does state that a Protector can resign but attempts to contact the Protector asking him to resign have failed. Although we are aware where the Protector resides he has not responded to us. There is nothing in the Trust specifically allowing the removal of an uncooperative Protector. My question is whether there is anyway, other than an application to Court, to remove a Protector who is not co-operating, in favour of the substitute Protector?
Thank you in advance.

Kathryn Thornewill
Franklins Solicitors

No. A threat of Court proceedings and related costs may get their attention though.

Personal service might be worth the investment.

Andrew Goodman
Osborne Clarke LLP

Presumably the governing law is non-UK. Therefore I shall opine without having any competence to do so (which never deters lay clients or spouses).

Ominously I have to say that a well-drafted offshore trust does not normally contain a removal clause as this could undermine the whole concept of Protector but should provide at least for an alternative Protector if the appointed person fails to respond within a fixed time to the service of a notice to act. In effect this allows a limited change of Protector in carefully defined circumstances, perhaps only quoad the precise issue, and the recalcitrant appointee has only himself to blame. Some offshore jurisdictions have statutory provisions for naughty Protectors as for trustees of similar proclivity.

Of course the truly spiteful Protector may just give you the answer you do not want and you may then need to resort to court action to challenge for breach of fiduciary duty. This Protector stuff is a calculated risk especially where the family has no trusted member to act who is permanently resident and domiciled abroad, beyond HMRC’s information-gathering powers and able to consign their communications to the WPB. That may be tactically unwise as HMRC has methods (not including waterboarding, yet) of making onshore beneficiaries to avoid penalties plead for a response to a disclosure request e.g. requiring them to litigate to enforce their equitable right to disclosure or due administration…

A professional appointee may be the only solution as Protector and will not have the essential Nelson touch of family trustees/Protectors, who can occasionally enjoy the conscience of a well-trained hippopotamus. It may be difficult to get such a person to respond if they think that it is not in the interests of beneficiaries other than the one being thumbscrewed. I did once secure a settlement by the offshore trustees confirming to HMRC that the undisclosed true (indirect funds) settlor was not and never had been resident in the UK or domiciled in one of its jurisdictions.

Unkindly I would feel more comfortable as the draftsman of this trust deed if I had not drafted it so as to reasonably avoid the need to go to court; and I or my insurers might think that I should volunteer to pay the costs, unless the question asked justifies a charge to the trust fund. That is definitely not my department as a mainly tax advisory bod and non-contentious equity lawyer.

Jack Harper