Case study: how a family replaced a trustee who stopped answering

This is a fictional, anonymous case study. The people, the places and the sequence are invented to illustrate a real question: how do you replace a trustee who has simply stopped answering? Nothing here describes an actual family, trustee or court decision, and the outcome would differ with the trust deed and the law that governs it.

The case is useful because silence rarely looks like a crisis. It looks like a delayed reply, then a missing statement, then a distribution that never arrives. By the time the family names the problem, the evidence is scattered. The story below follows the method from first doubt to a signed appointment.

The setting: a family trust that drifted

Imagine a family established in Lausanne. The settlor, a retired engineer we will call Mr A, set up a discretionary trust years ago with an individual trustee based abroad, a lawyer he knew personally. The beneficiaries are his two adult children and, later, their own children. The deed names a protector: an old friend of the family, Ms P, with a power to remove and appoint trustees.

At first the arrangement worked. Then Mr A became less active, and the trustee's replies grew shorter and rarer. Years passed without a meeting. Requests for information were acknowledged, then ignored. The adult children assumed their father was handling it; their father assumed the trustee was.

The trust itself is a foreign trust. Switzerland has recognised foreign trusts since the Hague Convention on trusts entered into force for it on 1 July 2007, so the family's question was never whether the trust exists in Swiss eyes. The question was who is actually running it.

Reading the silence: signs that mattered

The family did not start with a replacement. It started with a list of what had stopped happening. In this fictional case the signs were typical:

• No annual accounts or statements had reached anyone for a long period.
• Requests from a beneficiary for information went unanswered.
• A bank reached the family directly, because its own letters to the trustee were not being returned.
• No record of decisions, meetings or distributions could be produced.
• The trustee's contact details had changed without notice.

None of these alone proves a breach. Together they described a trustee who was no longer performing the role. The duties a trustee owes beneficiaries and the information your trustee must give you are the yardsticks: if the deed and the governing law require regular accounts and decisions, silence is a measurable gap, not a mood.

What the family did not do

They did not write an angry letter on the first day, and they did not move assets informally. A hostile first move can push a disengaged trustee into defending himself, or into disappearing altogether. Instead the family treated the first weeks as a fact-finding exercise.

The evidence file

Before anyone acted, Ms P, the protector, asked the family to build a plain file. In this case it contained:

1. The trust deed and every amendment the family could find.
2. Any letter of wishes the settlor had signed.
3. All correspondence with the trustee, in date order, including unanswered requests.
4. Bank and custodian statements the family could lawfully obtain.
5. A short note of every attempt to reach the trustee, with the channel used.

The deed mattered most. It answered the questions that decide the route: who may remove a trustee, who may appoint a successor, whether the power sits with the protector, the settlor or a majority of adult beneficiaries, and what the retirement or removal must look like on paper. The checklist of documents to gather before changing trustee covers the same ground in a reusable form.

Timeline of silence, evidence and replacement

The protector steps in

The protector is the person most often able to move quickly, because the deed may give the protector a power of removal and appointment that the family does not hold. In this case Ms P read the deed first and confirmed that she could act, with the settlor's consent as a courtesy rather than a requirement.

She then sent a formal written notice to the trustee, by every channel on file. The notice did three things: it listed the information requested, it set a reasonable period to respond, and it said clearly what would follow if there was no answer. It was short and neutral. A notice like this is evidence in itself: it shows that the silence continued after a clear request.

This is also where the limits of a protector appear. A protector's powers come from the deed, not from friendship, and they can be narrower than people assume. Some deeds make a removal depend on the consent of another person or on specific grounds. Our pages on working with a protector and the trustee, protector and beneficiary triangle explain what those powers usually allow and where they stop.

Choosing the successor

The deadline in the notice passed without a reply. Ms P and the family could now move from diagnosis to choice, and this was the stage they were most tempted to rush. Anyone can be replaced quickly; replacing well takes a method.

They wrote down what they needed before looking at names: a regulated trustee, authorised and supervised in Switzerland, able to take over a trust governed by foreign law, willing to read the full history before accepting, and comfortable with a protector who keeps real powers. They then compared candidates on the same questions, using the approach in how to choose a trustee in Switzerland and the due diligence questionnaire.

A short comparison shows what the family weighed:

The family also asked whether a fix rather than a switch was realistic. Because the trustee had not responded to formal notice, it was not.

The appointment

The chosen successor, a professional trustee company, asked for the evidence file before agreeing. That was reassuring rather than slow: a trustee that accepts a trust without reading its history takes on problems it cannot see. Once satisfied, it prepared a deed of retirement and appointment, setting out the removal of the former trustee under the deed's own power and the appointment of the new one.

Where an outgoing trustee does not cooperate, the successor typically has to work from third-party records, such as custodian statements, and may need to ask the banks to recognise the new appointment on the strength of the deed and the protector's documented decision. Banks differ in what they ask for, so this part should be planned early. The handover file from the outgoing trustee shows what a complete transfer looks like, and what the successor must reconstruct when it is incomplete.

What the review found

After the appointment, the new trustee carried out a full reading of the deed, the records and the tax position, which is the work a trust review and audit is designed to do. In this fictional case the review found missing minutes for several decisions, out-of-date information on the beneficial owners held by one bank, and a letter of wishes that no longer matched the family's circumstances. None of these was dramatic; all of them were costly to leave unaddressed.

The new trustee then agreed a reporting calendar with the protector and the family, so that the silence could not return unnoticed.

What this story cannot tell you

A fictional case is a method, not a forecast. Four limits are worth stating plainly:

• The deed decides the route. Another deed could give removal power to a different person, or require a court.
• The governing law matters. The law of the trust, the family's residence and the location of the assets can each change the steps.
• Mandatory rules can apply. The Hague Convention leaves room for mandatory rules of the forum on matters such as inheritance rights and the protection of minors, so a plan that looks neat on paper may need adjusting.
• Cooperation varies. Some outgoing trustees help; some do not; some cannot be found.

If your own situation looks similar, a replacing a failing trustee guide gives the general route, and an individual analysis of your deed is the only way to know what applies to you.