Over the past few years, Canadian courts have started taking note of the existence of trust protectors. Despite comments from a certain Saskatchewan judge in 2009 (“As indicated, the term “trust protector” is foreign to me…”), recognition of trust protectors as a legitimate party to a trust may be on the horizon in Canadian trust law.
The traditional trust involves three parties: the settlor, the beneficiary, and the trustee. One of the major drawbacks of a trust is that the settlor is required to give up control over the property. Although trusts can be structured in a manner that might allow a property owner to retain some of that control, property owners who exert control over their property after it is settled in a trust risk certain tax liabilities or a finding in court that the trust is a sham. Another method for retaining some control is to use a trust protector.
A protector is a fourth party to the trust. Andrew Holden, author of Trust Protectors (Bristol, UK: Jordan Publishing Ltd., 2011), offers the following definition of “trust protector”:
‘Protector’ means a person occupying an office created by a trust instrument distinct from that of trustee, whether or not referred to as protector, upon which has been conferred power(s) or right(s) enabling the office-holder to participate in the administration of the trust or the disposition of trust assets.
Notably, the protector’s role may be written into the trust instrument free of the fiduciary duties placed upon trustees. Protectors may be granted powers of genuine discretion (a power to act with no mechanism for compelling action), or they may be granted passive powers, such as the power to obtain information from the trustee. These examples are not exhaustive of the nature and extent of a protector’s involvement.
Holden notes that the office of protector is frequently written into offshore trusts, and has even received legislative recognition in certain jurisdictions. In Canada, however, incorporating a protector into a trust presents a number of challenges. Domestically, protectors remain a lesser used tool in trust planning, though the concept is not completely foreign. As a creature of practice, rather than of statute, protectors are variously referred to as “guardian”, “advisor”, “specified person”, or “manager”. These two factors combined make a survey of Canadian law for judicial reactions to protectors difficult business.
Despite these challenges, references to “trust protectors” have begun to appear in Canadian jurisprudence, though there is as yet no significant judicial discussion of the use and validity of protectors for Canadian based trusts.
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 Whitefox Air Inc. v. Canada (Attorney General), 2009 SKPC 112.
 Though the office may be held by a person who is a settlor or beneficiary of the said trust.
 Trust Protectors at 10.
 For an in-depth discussion of the emergence of trust protectors in Canadian law, see D.W.M. Waters, Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Thomson Reuters, 2012) at 134-138.
 Trust Protectors at 1.
 See, e.g., Whitefox, supra, or United States of America v. Rogan, 2014 BCSC 2370.