¶ 901
Overview
Scope of the chapter. A Nevis international trust divides control among three offices. The trustee holds the property and makes the decisions the deed commits to it. The beneficiaries hold the interests. Between them, and often holding the most important powers in the deed, sits the protector. The Nevis International Exempt Trust Ordinance gives the protector more statutory attention than most offshore trust laws do. It defines the office, gives it a default power to change trustees, lists the powers a deed may add, states that the protector owes a fiduciary duty unless the deed provides otherwise, protects trustees who follow a protector's directions, removes a protector from office when a foreign court acts against it, and allows the settlor to hold the office. Nevis International Exempt Trust Ordinance, Cap. 7.03(N), §§ 2, 8, 9(4), 10, 16, 24, 37, 38, 51, 53 (rev. ed. 2017) ("NIETO"). This chapter examines those rules and the case law that fills the gaps between them.
Plan. The chapter treats the office of protector and its statutory definition (¶ 910); the powers the Ordinance gives the protector and those a deed may add (¶ 920); whether those powers are fiduciary or personal (¶ 930); the scope of a power to consent to or veto a trustee's decision, on which the Privy Council ruled in March 2026 (¶ 940); the supervision, appointment and removal of protectors by the Court, including In re Corona Trust (¶ 950); the settlor's use of the protector office and the other powers section 53 allows a settlor to keep (¶ 960); the protector's position when a creditor or a foreign court applies pressure (¶ 970); the licensing, remuneration and liability of protectors (¶ 980); and the drafting of protector provisions, with a checklist (¶ 990).
Relation to other chapters. The settlor's retained powers as a matter of trust validity, and the law of sham and illusory trusts, are examined in chapter 6 (see supra ¶ 680). The trustee's side of the protector relationship, including the protection of directed trustees under section 10(4) to (6) and the trustee's response to foreign pressure, is examined in chapter 7 (see supra ¶¶ 760.05, 780). This chapter takes the protector's side of both. The treatment of a protector's powers by courts in the settlor's home country, including civil contempt, is examined in full in chapter 25 (see infra ch. 25), and the United States tax consequences of powers held by a settlor or protector in chapter 29 (see infra ch. 29). The comparative discussion of protectors across jurisdictions appears in Lighthouse on Asset Protection, which this chapter cites where it carries the fuller treatment.
Why the protector matters in Nevis. The protector is the person most likely to be asked to act when the trust comes under pressure. A creditor that cannot reach the trustee in Nevis will look for a person within its own court's reach who can change the trustee, direct a distribution or move the trust. In most Nevis trusts that person is the protector. Three questions therefore recur through this chapter: who holds the office, what powers it carries, and whether those powers must be exercised for the beneficiaries or may be exercised as the holder wishes. The answers decide whether the protector strengthens the trust or becomes the route by which a foreign court reaches it.
Key terms. The chapter uses the following terms. A protector is the holder of a power over the trustee's decisions or over the appointment of trustees, as defined in section 2 (see infra ¶ 910.02). A fiduciary power is a power its holder must exercise in good faith for the purposes for which it was conferred and in the interests of the beneficiaries; a personal power is one its holder may exercise in its own interest, subject only to the terms of the grant. A consent power is a power to approve or veto a decision the trustee proposes; a directive power is a power to require the trustee to act. A settlor-protector is a settlor who holds the office of protector, alone or with others.