Often a trust gives powers to someone other than the trustee, usually because the settlor wishes to introduce a third party into the trust in order to police the actions of the trustee.The “protector” of the trust or advisor, committee or appointer, as the position is sometimes referred to acts as a safeguard against the potential abuse of power by the trustee, for fear of an incompetent or apathetic trustee, or otherwise to ensure that the trust is administered in the spirit in which the settlor intended.The office of protector involves the conferral of a supervisory power upon the appointee through the inclusion of various powers in the trust deed. The protector could be someone the settlor knows and trusts implicitly, such as a close family friend or a trusted professional advisor. In fact, the settlor could even appoint himself to carry out the role (although this may not be sensible from a tax planning perspective).Alternatively, the settlor could opt for a wholly independent party to undertake the function, such as a professional corporate entity.The overriding aim of appointing a protector is to facilitate the smooth running of the trust in the intended manner, while providing an effective liaison between the trustee and the beneficiaries.This affords the settlor a degree of comfort, particularly the nervous settlor who is reluctant to relinquish control over his assets to an unknown and untried trustee.The appointment of a protector ensures that the settlor is secure in the knowledge that his wishes are more likely to be carried out with a trusted party overseeing the trustee and, where necessary, restraining the arbitrary actions of an overbearing trustee.A protector is routinely given the responsibility to sanction (and thus the right to veto) certain actions of the trustee. Such powers could include the right to approve the trustee's proposed changes to the terms of the trust including additions or exclusions in respect of the class of beneficiaries, the right to sanction a change in the governing law of the trust, or the right to approve distributions to the beneficiaries.In other cases, there may be certain key powers vested directly in the protector to the exclusion of the trustee.For example, the protector may be able to unilaterally remove the trustee and appoint a new one, or he may be able to dictate trust fund investment decisions.However, a protector's powers are not unrestricted; a protector has a fiduciary duty to exercise those powers for the purpose for which they were conferred. Broadly, this means that they must be exercised in the best interests of the beneficiaries.Thus, there are clear parameters within which the protector's powers must be exercised and this provides a buffer against the potentially arbitrary or irrational exercise of such powers.These principles were re-affirmed in a recent court decision, where it was held that a protector:n is generally bound to exercise his powers in good faith and in the spirit in which they were granted to him by the settlor;n is obliged to exercise his powers for the benefit of one or more of the beneficiaries;n will need to consider the exercise of his powers from time to time and will need to give consideration only to relevant matters; and thatn decisions should be made without regard to private interests and seeking to benefit personally from the exercise of fiduciary powers is forbidden.Ultimately, the court has the ability to police the duties of any person in a fiduciary position in order to protect the interests of the beneficiaries of the trust, thereby ensuring that the wishes of the settlor are respected as far as is possible and appropriate.Attorney Naresh Chand is a Senior Associate in the Private Client and Trusts Practice at Appleby. A copy of Mr. Chand's column can be obtained on the Appleby website at www.applebyglobal.com.This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.