Trusts: When Protectors Fail

Protectors of discretionary trusts sometimes find themselves in the unfortunate position of being asked by a beneficiary, or class of beneficiaries, to resign for reasons that are not always justified. 

However, a stark example of when it was indeed time to step down was addressed in the judgment of the Royal Court of Guernsey (the Court) in Bernheim v Krummenacher & Ors, dated 8 August 2025.¹

The Court did not hesitate to grant the sole beneficiary's application for the removal of the first and second respondents as the Class A Protectors of the Billevese Trust (the Trust) and the appointment of a highly experienced fiduciary as the replacement Class A Protector. Following judgment on the substantive relief sought, the parties agreed that the usual indemnity afforded to protectors should be disapplied and that the Class A Protectors should pay the applicant's costs on an indemnity basis.²