Trust Protector

We have a client who is wanting to add an individual portfolio manager to his Trust as a Trust Protector (TP). I have reviewed the rights that a Trust Protector would have. However, I am confused on whether or not this constitutes custody. A TP can modify a trust document, increase or decrease the interests of any beneficiaries, modify power of appt terms, terminate the trust, among other things.

For example, the settlor may wish to appoint a trust protector who is a professional financial manager and give the trust protector the power to approve or veto the trustee's investment decisions. The settlor may also want to appoint a trust protector to oversee the trustee's management of the trust assets if he feels that the trustee may eventually be unable to make good decisions at a later time because of poor health or advancing age. In addition, the settlor could give the trust protector the power to review and approve the trustee's accounts. Obviously, a trust protector's powers need not be limited to financial oversight. Instead, the settlor may wish to give a trust protector the power to approve or veto discretionary distributions of trust assets to beneficiaries. In fact, the trust protector can be authorized to approve or veto any exercise of discretion by the trustee.

Could someone shed some light on this issue for me? Thank you.

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