Protective Trust: Trust Law Definition

A trust that automatically converts to a discretionary trust if certain events occur - such as a beneficiarys bankruptcy, divorce, or attempt to assign their interest. Protects assets from being seized by creditors or lost in divorce settlements. The beneficiary typically has an interest in possession until a "trigger event" occurs.

This definition is part of the Equity Steward Trust Law Glossary — a plain English reference for UK families and trustees.