Practical Law UK Glossary 1-107-7074 (Approx. 3 pages)
Glossary
Protective trust
A type of private trustthat enables the settlor to provide protection for an immature or reckless beneficiary by transferring assets to trustees to hold on protective trusts for that beneficiary. A beneficiary initially receives a life interest in the trust fund which is protected in that it automatically comes to an end if, for example, he is declared bankrupt or attempts to assign his interest to his creditors. The fund will then be held on discretionary trusts for the benefit of a wider class of beneficiaries which will include the beneficiary and his family.