¶ 1401
Overview
Scope of the chapter. Chapter 11 traced how the law came to recognize the trust protector, chapter 12 catalogued the powers a protector may hold, and chapter 13 asked whether a protector holds those powers as a fiduciary. See supra chs. 11–13. This chapter addresses the life of the office itself: how a protector comes into office after the first holder, how a protector leaves it, who may push a protector out, what happens when nobody holds it, and the way an office held by more than one person reaches a decision when its members disagree. These questions are mechanical in appearance and constitutional in effect. A trust that will run for generations will outlive its first protector, and probably its second and third. Whether the protector structure works over that period depends less on the powers the instrument grants than on the rules that decide who holds them.
Why the office fails. Protector arrangements fail in four recurring ways. The first is the vacancy no one anticipated: the named protector dies, loses capacity or declines to serve, the instrument names no successor or names one who has also died, and powers the settlor regarded as essential lapse or wait on a court. The second is capture: the power to appoint a successor, or to remove the incumbent, sits with a person whose interests differ from those of the beneficiaries as a whole, and the office passes into hands that use it for one faction. The third is entrenchment: a protector who has lost the confidence of the family, or who misunderstands the office, cannot be removed under the instrument, and the beneficiaries must persuade a court to intervene. The fourth is deadlock: two or more protectors, or a protector and a trustee, cannot agree, and the instrument provides no way out. Each of these failures has produced litigation, and the decisions examined in this chapter show how courts respond when the instrument is silent or its machinery has broken.
The governing principle. Two strands of authority run through the cases. The first is construction: the court reads the instrument to find the settlor's plan for succession and removal, and enforces it as written. A removal that does not follow the instrument's procedure is ineffective, however strong the reasons for it. See infra ¶ 1430 (McDevitt v. Wellin). The second is supervision: where the office is fiduciary, the court has an inherent jurisdiction, analogous to its jurisdiction over trustees, to remove a protector whose continuance would be detrimental to the execution of the trust, to set aside an appointment that no reasonable appointor could have made, and to fill a vacancy that the instrument's machinery cannot fill. See infra ¶¶ 1440, 1450. The drafter's task is to write succession and removal provisions complete enough that the first strand decides most disputes, so that the second need be invoked rarely.
Terminology. This chapter uses "protector" for any person, other than a trustee, who holds a power over the trusteeship or the instrument under the terms of the trust, whatever the instrument calls the office. It uses "appointor" for the person who holds a power to appoint a protector, and "remover" for the person who holds a power to remove one. Where a statute uses a different term, such as the Uniform Directed Trust Act's "trust director," the text uses the statute's term when discussing the statute. See supra ¶ 1140 (the Act's functional definition).
Plan of the chapter. Paragraph 1410 examines the ways an instrument may provide for succession and the conflicts each method creates. Paragraph 1420 addresses incapacity, resignation and the release of powers. Paragraph 1430 examines removal under the instrument, and ¶ 1440 removal by the court. Paragraph 1450 addresses vacancy, the lapse of powers and court appointment, and compares the statutory default rules. Paragraph 1460 addresses offices held by more than one person and the resolution of deadlock. Paragraph 1470 examines conflicts between protector and trustee. Paragraph 1480 addresses succession under the pressure of litigation, including duress and flight provisions. Paragraph 1490 sets out model provisions and a drafting checklist.