Re The X Trusts 2026 – The Rise of the Protector

What the Privy Council’s decision in A and 6 others v C and 13 others (otherwise known as the Re the X Trusts) means for offshore trust governance

For decades, the trust ‘protector’ was treated by many as a background feature of an offshore structure — a trusted family adviser or friend, the alter ego for the settlor, added to a trust deed to keep an eye on the trustee, rarely expected to do more than nod through sensible proposals. A landmark ruling from the Judicial Committee of the Privy Council has now overturned that assumption, and the implications affect every wealth manager and private banker whose clients hold assets through offshore trusts.

A case that redraws the balance of power

On 19 March 2026, the Privy Council handed down its judgment in A and 6 others v C and 13 others [2026] UKPC 11, widely known as Re the X Trusts, an appeal from Bermuda concerning a series of large discretionary trusts. The trustees had proposed restructuring the trusts by appointing assets between different family branches, a step that required the prior written consent of the trusts’ protectors. It was agreed between the parties that the proposal was within the lawful discretion of the trustees. However, the protectors indicated they were unlikely to approve the plan, and litigation followed over a single but critical question: when a trust deed requires a protector’s consent, is the protector merely a ‘watchdog’ confirming the trustee’s decision is lawful and reasonable (the Narrow Role), or can the protector exercise their own independent judgment and refuse consent even to a proposal the trustee could properly make (the Wider Role)?

The Bermuda courts, at first instance and on appeal, had favoured the Narrow Role. The Privy Council unanimously reversed both decisions and held that the protectors had the Wider Role. The Board framed the real question as one of construction: what constraints, if any, does the trust instrument itself impose on the protector? Absent clear wording limiting the protector to a supervisory check, the starting position is that a protector holding a consent or veto power may exercise it as an independent, substantive discretion — subject only to standard fiduciary constraints of good faith, no conflict, and proper purpose.

Why this matters beyond the courtroom

The decision settles a long-running debate and provides authority not only in Bermuda but across Jersey, Guernsey, Isle of Man, BVI, the Cayman Islands and other offshore jurisdictions whose ultimate court of appeal is the Privy Council. For clients and their advisers, three practical consequences follow.

The protector is no longer a passive formality. Where a trust deed is silent on how consent powers should be exercised — as most are — the default position now favours a protector with real, independent decision-making power, not a rubber stamp.
Trustees can no longer assume that a rational, lawful proposal will secure consent. They should expect earlier and more substantive engagement with the protector, fuller justification of proposals, and a genuine risk of principled disagreement or deadlock, which the Board expressly accepted as a feature the settlor may have built into the structure.
Most significantly for intermediaries advising on new or restructured trusts, the identity and calibre of the protector now matter more than ever. A protector exercising the Wider Role is a fiduciary in substance, carrying real decision-making weight and corresponding exposure to significant breach of trust and other claims. This also means it owes duties to the beneficiaries, not the settlor. Families and their advisers should think carefully about who is best placed to hold that office: someone who understands both the family’s objectives and the legal and fiduciary responsibilities the role now carries. This is likely to be best performed by a professional protector rather than a lay person who is merely a friend or confidant of the family.

A prompt to revisit existing structures

For trusts already in place, this is a natural moment to review how protector provisions are drafted and whether they reflect the settlor’s original intentions. For new structures, drafting now needs to state expressly whether a protector’s role is meant to be limited to a legality review, since silence will be read as conferring the broader power. We are actively advising clients and their intermediaries on both fronts, and are always happy to discuss what this shift means for a particular family’s structure or for the choice and appointment of a protector.

Against this background, many settlors and their advisers are now considering not just whether to appoint a professional protector, but where that protector should be based. Moreover, a corporate protector established in a well governed jurisdiction separate from the trust itself can offer particular advantages worth weighing alongside the family’s existing structure:

Continuity and institutional memory — a corporate protector does not face the mortality, incapacity or disengagement risk of an individual, and decisions are supported by internal governance and succession planning rather than resting on one person.

Genuine independence — a protector with no personal, family or historic ties to the settlor or trustee is better placed to exercise the substantive fiduciary judgment the Privy Council now expects, reducing the risk of a protector being seen as an extension of the settlor. Even better where the protector does not itself offer trustee services so that it exercises its judgement without any actual or perceived conflict of interest.

Separation from the settlor’s and trust’s home jurisdiction — locating the protector outside the settlor’s home courts reduces the risk of a local court compelling the protector to remove a foreign trustee or otherwise assert control over the trust, a risk that has materialised in past litigation. Placing the protector outside the trustee’s home jurisdiction also makes sense, particularly useful if the trustees are to be replaced with trustees in another jurisdiction or the trustees wish to change law and place of administration applicable to the trust.

Professional standards and insurance — a regulated corporate fiduciary brings documented decision-making processes, compliance policies and professional indemnity cover, helping demonstrate that consent decisions were reached properly if ever challenged.

Switzerland as the seat — a Swiss corporate protector adds a politically neutral base with a mature, high quality and internationally-facing trust and fiduciary industry, well regulated for anti-money laundering purposes and (through Switzerland’s adherence to the Hague Trusts Convention) a legal and fiscal environment that recognises the separate roles of trustee and protector despite Swiss law not itself being a trust jurisdiction.

Quastels LLP offers professional advice on how to evaluate and utilise the use of protectors in international trust structures.