A deed of retirement and appointment (often called a deed of appointment and retirement of trustee) is the signed document by which one trustee steps down and another takes over the trust property and the office. It is the legal hinge of any change of trustee: the trust deed says who may make the change, and this deed records that it was done properly. The terms below are the ones you will meet around it. For the full sequence of a change, read changing trustee step by step.
A
Acceptance of office
The written confirmation by the incoming trustee that it agrees to act, usually inside or alongside the deed of appointment. Until it is given, the incoming trustee is not bound by the trust's duties. A professional trustee normally completes its own checks before signing.
Anti-money laundering (AMLA / GwG / LBA)
The Swiss legislation on money laundering applies to professional trustees, which must identify the settlor, the beneficial owners and the origin of the assets. A change of trustee therefore triggers fresh identification work for the incoming trustee, even if the trust is long established.
Appointment of trustee
The act of naming a person or company as trustee, either when the trust is created or later to fill a vacancy. The power to appoint is set out in the trust deed and may sit with the settlor, the protector, the existing trustee or a mix of them.
B
Beneficiaries
The people, or classes of people, for whom the trust property is held. They are owed duties by the trustee, and their interests are a main reason a change of trustee must follow the trust deed. See what a trustee owes the beneficiaries.
Beneficial owner
The natural person who ultimately benefits from, or controls, the trust assets for compliance purposes. Banks and trustees must identify them, and the answer in a trust can include the settlor, the protector and the beneficiaries. See beneficial owner.
C
Co-trustee
One of several trustees who act together. A deed can add a co-trustee without anyone leaving, or let one co-trustee retire while the others continue. Whether decisions must be unanimous depends on the trust deed.
Continuing trustee
A trustee who stays in office when a colleague retires or is replaced. The continuing trustee often has to receive the departing trustee's papers and confirm that the trust property is properly vested.
Corporate trustee
A company that acts as trustee, as opposed to an individual. In Switzerland, a trustee with its seat or domicile in the country must be a sole proprietorship, a commercial company or a cooperative entered in the commercial register (Article 18 FinIA). A company continues after a director leaves, which is why many families prefer it to an individual.
D
Deed of retirement and appointment
The instrument that records the retirement of the outgoing trustee and the appointment of the successor in one step. A single deed avoids a gap in which the trust has no trustee. It typically identifies the trust, cites the clause that allows the change, names both trustees, confirms the transfer of trust property and may include acceptance and releases.
An example (fictional, for illustration): a family established in Lausanne holds a discretionary trust with a trustee abroad. The trust deed allows the protector to replace the trustee. The protector signs, the outgoing trustee signs to retire, the new Geneva trustee signs to accept, and the deed lists the bank accounts and records to be handed over.
Deed of discharge (release)
A document, or a clause in the deed of appointment, in which beneficiaries or the incoming trustee release the outgoing trustee from claims about its past administration. Its scope and validity depend on the facts, the trust deed and the applicable law, so it needs individual analysis.
Discretionary trust
A trust in which the trustee decides who among a class of beneficiaries receives distributions, and when. Because the trustee's judgement is central, the choice of successor matters particularly. See the trustee of a discretionary trust.
Due diligence
The checks a new trustee runs on the settlor, the assets and the structure before accepting office, and the checks you run on the trustee before agreeing to the change.
E
Exculpation clause
A trust deed clause limiting a trustee's liability for certain failures. It affects what the outgoing trustee can be asked to answer for and what a successor accepts. See exculpation clause.
F
FINMA
The Swiss Financial Market Supervisory Authority. It grants the authorisation that Swiss professional trustees need and supervises them alongside an oversight body. Trustees are financial institutions within the meaning of Article 2(1)(b) FinIA.
FinIA (FinIG / LEFin)
The Swiss Financial Institutions Act. Under Article 17(2), a trustee is anyone who, on a professional basis, manages assets set apart, or disposes of them, for a beneficiary or for a specific purpose on the basis of a trust deed within the meaning of the 1985 Hague Convention. The activity is professional when it is an independent economic activity carried out to earn regular income (Article 3).
H
Handover file
The set of documents and records the outgoing trustee gives the successor: trust deed and amendments, minutes, accounts, correspondence and bank details. A complete file is what lets the successor administer the trust without gaps. See the handover file checklist.
Hague Convention on Trusts
The 1985 Hague Convention on the Law Applicable to Trusts and on their Recognition. Swiss law uses it to recognise trusts governed by foreign law, and the FinIA definition of a trustee refers to it.
I
Individual trustee
A natural person acting as trustee. A change is needed when that person dies, retires or loses capacity, which is why the deed should name a successor in advance. See individual or corporate trustee.
Irrevocable trust
A trust the settlor cannot simply unwind. Changing trustee is still possible if the trust deed or the governing law allows it, but the settlor's role is usually narrower than in a revocable trust.
L
Letter of wishes
A non-binding note from the settlor guiding the trustee's discretion. A new trustee should receive it, read it and ask whether it needs updating. See letter of wishes.
O
Outgoing trustee
The trustee who retires or is removed. Its duties include handing over the property, records and information in good order, and cooperating with the successor.
Oversight body (organisme de surveillance, OS)
The body that carries out the day-to-day supervision of trustees on behalf of FINMA, itself authorised and supervised by FINMA. Changes in facts must be reported to it in advance, which can include a change in the trustee's own management. FINMA's published list of supervised trustees names several oversight bodies, among them SO-FIT.
P
Power of appointment
The power, set out in the trust deed, to name or replace a trustee. Check who holds it before anything is signed: an appointment by the wrong person can be challenged.
Protector
A person with oversight powers, often including the power to remove and appoint trustees. See protector.
R
Removal of trustee
The ending of a trustee's office against its will, either by a power in the trust deed or by a court. It is the usual route when relations have broken down. See replacing a failing trustee.
Reserved powers
Powers the settlor keeps over the trust, sometimes including the power to change trustee. They affect who can sign the deed and how independent the trustee is. See reserved powers.
Retirement of trustee
A trustee's voluntary departure. The trust deed or law usually requires that someone else is in place, or that the retirement takes effect only when a successor is appointed.
Revocable trust
A trust the settlor can revoke or amend. The settlor often holds the power to replace the trustee directly.
S
Settlor (constituant / Errichter)
The person who creates the trust and transfers assets to it. In many changes of trustee the settlor is the first person to be consulted. See settlor.
SO-FIT
A non-profit association authorised by FINMA. It acts both as a self-regulatory organisation for anti-money-laundering purposes and as a prudential oversight body for asset managers and trustees.
Successor trustee
The trustee named, or later chosen, to take over. See successor trustee.
T
Trust deed
The founding document setting out the trust's terms, the powers of each party and the mechanism for changing trustee. The deed of appointment relies on it, so it is the first document to read.
Trust property
The assets held in the trust: bank accounts, securities, shares, real estate and other holdings. A deed of appointment records their transfer to the new trustee or confirms that they now vest in the new body of trustees.
Trustee
The person or company that holds and manages the trust property for the beneficiaries or for the trust's purpose, in line with the trust deed. Under Article 19(2) FinIA the trustee manages the separate assets, preserves their value and uses them in line with their purpose.
V
Vesting of trust property
The legal passing of assets into the trustee's name or control. After a change of trustee, vesting may need separate steps, for example with banks and registers, even when the deed is signed.
Frequently asked questions
Does a change of trustee always need a deed?
In practice, yes: a written instrument is how the change is proved to banks, registers and other parties. The exact form depends on the trust deed and the governing law, so it needs an individual review.
Who signs a deed of retirement and appointment?
Usually the outgoing trustee, the incoming trustee and whoever holds the power of appointment, such as the settlor or the protector. Sometimes continuing trustees also sign.
Does the new trustee inherit past mistakes?
That depends on what the deed says, the releases given and the law applicable. A review before accepting office is meant to find such issues early. See due diligence on your trustee for the questions to ask.
Sources
Considering a trust, or reviewing one?
Describe your situation in a few lines. A Geneva-based trustee reviews it in confidence and replies in writing.