Trustee continuity planning: what happens when the trustee is not there

Trustee continuity planning is the work of deciding, before anything goes wrong, who steps in when your trustee cannot act. A trust is meant to outlast the people who set it up, yet it depends every day on a trustee who signs, decides, keeps records and answers beneficiaries. If that trustee dies, retires, falls ill, is acquired by another firm or loses an authorisation, the trust does not pause. Bank accounts still need instructions, distributions still fall due, and nobody may have the authority to act.

This guide is written for settlors, family members, protectors and advisers who want to know what a sound continuity arrangement contains and how to check whether their own trust has one. It covers the successor trustee, key-person cover, signing powers and access to records, and it explains why the trust deed is the right place to start. It is general information, not advice: the right arrangement depends on the governing law of the trust, the assets it holds and the people involved, and it needs an individual analysis.

Why continuity is a question for the trust deed

The trustee is the legal holder of the trust assets, but the assets are not the trustee's own. The Hague Trusts Convention, which Switzerland applies to trusts, describes recognition of a trust as implying at least that the trust assets are separate from the trustee's personal estate and that the trustee can sue and be sued in that capacity (Article 11). That separation is what makes continuity possible: when a trustee ceases to act, the assets stay in the trust and a new trustee can take over the office. It does not, however, say who the new trustee is, how quickly the replacement must happen or who may sign in the meantime. Those answers come from the trust deed, the governing law and any court that has to be asked.

In practice, many trusts rely on a general power to appoint new trustees and nothing more. That is enough on a calm day. It is thin when the current trustee has just died and the only person who knew where the original documents were is gone. A continuity arrangement turns a general power into a workable sequence: who notices, who decides, who signs, who holds the records and who informs the beneficiaries.

If you are still choosing who should hold the office, the decision method for choosing a trustee in Switzerland is a better starting point. Continuity planning applies once a trustee is in place, or when you are reviewing the one you have.

The events a continuity plan has to cover

Absence takes several forms, and each one stresses a different part of the structure. Planning for "the trustee dies" alone leaves the more common cases uncovered.

• Sudden incapacity or death of an individual trustee. The office may be vacant at once, with no one authorised to deal with the bank.
• Planned retirement. Easier, but often handled informally, with a handover that leaves gaps in the records.
• Sale or merger of a trustee firm. The people you know may remain while the legal entity, its policies and its owners change. This is the least visible and, for firms, the most frequent event.
• Loss of authorisation or supervisory action. A firm may be barred from continuing to act, which forces a transfer on someone else's timetable.
• Departure of the key person. The firm still exists, but the individual who understands the family and the structure has left.
• Silence. The trustee is formally in office but stops answering. Nothing in the deed has "failed", yet the trust is not being run.

The guide to replacing a failing trustee covers the last case in detail. For an individual trustee, the situation pages on a trustee who has died or retired are the practical counterpart to this guide.

The four building blocks

1. A successor trustee, named or named by process

The successor trustee is the heart of any plan. There are two sound ways to provide for one. The first is to name an individual or a firm in the deed, or in a schedule to it that can be updated without reopening the whole instrument. The second is to name the person who holds the power to appoint, together with the criteria they must apply. Both can be combined: a named first choice, a fallback and a process if neither is available.

Pay attention to the following points.

• Who holds the power of appointment. If it sits with the settlor alone, it can lapse when the settlor dies or loses capacity. If it sits with the trustee alone, the retiring trustee chooses their own replacement. Many families give it to a protector, or split it in a way that survives the loss of any single person. See working with a protector for how that role operates in practice.
• Qualifications. The deed can require that any successor be a professional trustee that is authorised and supervised in Switzerland, or at least independent of the family. Without such a requirement, a person with a conflict of interest can end up in the office by default.
• Consent and acceptance. A named successor who has never agreed to act, and has never been through onboarding, may decline or take a long time to accept. Asking them in advance, and recording that they would in principle accept, shortens the gap.
• Court fallback. Most legal systems allow a court to appoint a trustee when the deed fails. That route is slower and more public than a private appointment. A continuity plan is meant to make it unnecessary.

The glossary entry on the successor trustee sets out the term. Once you have chosen a successor, the practical steps of the handover are described in changing trustee step by step.

2. Key-person cover

Where a trustee firm acts, the relationship is often personal in practice. One senior individual may know the family, the history of the distributions and the reasons behind earlier decisions. If that person leaves, falls ill or changes role, the trust formally continues while its working knowledge disappears.

Key-person cover addresses this inside the trustee firm. What you should expect to find:

• A named deputy or team, not just a single relationship manager, with real familiarity with the file.
• A documented file note of the family's circumstances, the settlor's intentions and the background to decisions, kept in the trust record rather than in a personal notebook.
• A rule on notifying the family and the protector when the responsible individual changes.
• Insurance or internal arrangements for the firm itself, so that a loss of a senior person does not become a loss of service. Ask what exists; a good trustee firm can describe its arrangements in general terms without disclosing confidential details.

For an individual trustee, key-person cover means something different. There is no team, so the equivalent is a co-trustee, an agreed successor, or a professional firm named as standby. The comparison in one trustee or co-trustees explains how having more than one office-holder changes the continuity picture, and individual or corporate trustee shows why the question often decides the choice between the two.

3. Signing powers

Continuity fails most visibly at the bank. An account in the name of the trustee, with signing authority held by named individuals, can be frozen or restricted when those individuals are no longer in place. A well-built arrangement does three things.

• Several authorised signatories, so that no single absence stops operations. Where the trust requires joint signatures, the arrangement must still work if one signatory is unavailable.
• A clear internal authority matrix at the trustee firm: who may sign what, up to which kind of decision, and what has to go to the full board or to a committee. This should be consistent with the deed and with the trust's own decision rules.
• A short, defined list of acts allowed during a gap. Interim cover should be able to pay recurring obligations and protect assets. It should not be able to make a large distribution, change the investment strategy or sell a family company on its own. The deed or the continuity page can say so.

Banks apply their own onboarding and compliance rules, and a new signatory or a new trustee has to be identified and accepted. That takes time which cannot be compressed after the event. The article on your trustee and the trust bank accounts describes how those accounts are normally set up and what the bank needs to see.

4. Records access

A successor who cannot find the documents cannot act with confidence. Records access is the least glamorous and often the weakest element. Key documents include the trust deed and every amendment, the letter of wishes, minutes and resolutions, the record of distributions and the reasons for them, the register of beneficiaries, identification and beneficial ownership records, bank mandates and statements, and any advice relied on by the trustee.

A sound continuity arrangement answers four questions about those records:

1. Where are they held, and in what form?
2. Who may open them if the usual custodian is absent?
3. Are copies held in more than one place, for example with the firm's records team and with the protector or a legal adviser?
4. Is there a handover file that the outgoing trustee must produce, in a form the successor can use?

The handover file from the outgoing trustee lists what a complete file looks like, and the guide to the information your trustee must give you explains what you, as settlor or beneficiary, can ask to see at any time.

How the building blocks fit together

The table below links each type of event to what tends to break first and to the provision that deals with it. It is a reading aid, not a legal checklist.

The power to remove and replace is easiest to use when the deed gave it clearly. Where that power is missing or shared awkwardly, the comparison trustee with or without a protector is worth reading before you amend anything.

The entry point: a continuity page in the deed

Many families find that adding a short, dedicated continuity page, either inside the deed or as a schedule referenced by it, is the most practical step. Reopening a whole trust deed is heavy, and in some cases it is not possible. A schedule that is designed to be updated, with a clear amendment mechanism, is far easier to maintain. What such a page typically contains:

• Triggers. A list of the events that start the continuity process, including death, incapacity, insolvency, a change of control of a corporate trustee and loss of authorisation.
• Notice. Who must be informed, in what form, and within what period. The period should be expressed in the deed itself rather than left to guesswork; this guide gives no figure because the right one depends on your circumstances and the governing law.
• Interim authority. Who acts during a gap, the matters they may deal with and the matters reserved for the new trustee.
• Successor sequence. First choice, second choice and the process for choosing if neither is available.
• Signatories and bank mandates. Which roles hold signing power and how that is refreshed.
• Records location. Where the original deed, the letter of wishes and the minutes are kept, and who has the authority to release them.
• Protector role. What the protector may do, including the power to remove a trustee that is not responding.
• Costs of the transition. Who bears the costs of the handover. The deed can say that the outgoing trustee or firm bears reasonable handover costs in defined circumstances. Remuneration depends on the structure and is explained after a confidential assessment.

A page of that kind does not replace legal advice on the deed itself. It gives the family, the protector and the trustee a shared reference document, and it makes the review of the deed easier. Your adviser can tell you whether the governing law of your trust allows it to be added by supplement, by deed of amendment or only with the agreement of the beneficiaries or a court.

An example: a trustee firm that is sold

The following is a fictional illustration. A family established in Lausanne set up a discretionary trust several years ago with a mid-sized trustee firm. Over time they dealt with the same senior trustee, who knew the settlor's wishes and the reasons behind each decision. The firm was then acquired by a larger group. The senior trustee stayed for a period, then moved on. The family received a short letter about a change in the firm's ownership, and later a change in the person responsible for the file.

Nothing in the deed was breached. The trustee entity was the same, so the trust assets were still held by the same trustee in law. Yet the family noticed three things. Replies took longer. A new policy on onboarding required fresh identification documents. A distribution that had been routine now needed extra explanation, because the new team did not have the background.

What would have helped is a continuity page with these elements.

• A change-of-control clause requiring the trustee to inform the protector promptly, and giving the protector the right to review the new arrangements and, if they are unsatisfactory, to appoint another trustee.
• A named deputy from the start, with a documented understanding of the family.
• A requirement that file notes about the settlor's intentions and earlier decisions be kept in the trust record and passed on automatically.
• A standing right to request a handover file, so that a move to a new trustee would be quick if the family decided to leave.

Not every sale of a trustee firm is a problem. Often the service continues and may even improve. The point of the continuity page is that the family does not have to rely on goodwill to learn about the change or to react to it. If the review shows the structure is no longer suitable, the guide to deciding whether to switch trustee or stay and fix the relationship helps weigh the options.

What the protector adds, and what it does not

A protector is often the person who makes continuity real. Because the protector is independent of the trustee, they can notice that something has changed, receive notices, hold the power of appointment and act when the trustee cannot or will not. The role has limits, however. A protector who is elderly, unreachable or in conflict with the family becomes a weakness. The deed should therefore provide for a successor protector, in the same way as for the trustee, and should avoid placing the power of replacement with a person whose own continuity is uncertain.

The trustee, protector and beneficiary triangle explains how the three roles interact, and the glossary entry on the protector defines the term. The case protector and trustee disagree over a distribution shows what happens when the two roles do not work well together.

Settlor reserved powers and continuity

If the settlor reserved powers, for example to appoint or remove the trustee, to approve investment decisions or to give directions, those powers matter greatly for continuity. They are also the most fragile, because they depend on the settlor being alive and capable. A continuity plan should say what happens to each reserved power when the settlor can no longer exercise it: whether it lapses, passes to the protector or passes to a named person. Silence in the deed can leave the trustee uncertain about whether to act, and a trustee in doubt tends to do less. See settlor reserved powers and the trustee relationship for more on this.

A short checklist to test your own trust

Use the list below as a first test. Each unticked line is a question for your trustee or your adviser.

• The trust deed, or a schedule to it, names who may appoint a new trustee, and that power survives the settlor's death or incapacity.
• A successor trustee or a successor process is written down, with a fallback.
• The trustee firm has a named deputy and can describe its key-person arrangements.
• More than one authorised signatory is registered with the bank, and interim acts are limited to routine and protective matters.
• The original deed, the letter of wishes and the minutes are held in a location known to at least two trusted parties.
• The trustee must tell the protector promptly of any change of control, key-person change or supervisory action.
• A successor protector is provided for.
• The continuity page has been reviewed in the last year, and again after any change in the family or the trustee.

A fuller version of this exercise is the annual trust health check, which is designed to be repeated each year. If you want a broader review of the structure and of the trustee, the service page on independent review of an existing trust explains how that works.

Common weaknesses in continuity arrangements

Reviews of existing trusts show a handful of recurring problems, none of which is exotic.

• Appointment power concentrated in one person. If that person is the settlor and the settlor has died, the power may have passed to no one.
• A named successor who has never been consulted. The name exists on paper but nobody has checked whether they would accept.
• A single signatory. One person holds the practical keys to the account.
• Records in one place. A single office, a single device, or a single person's files.
• No duty to inform the protector of a change at the trustee firm, so the protector learns about it from the beneficiaries or from a late invoice.
• A deed that refers to a firm by name and does not cover the situation in which the firm changes its name or merges into another entity.
• Out-of-date contact arrangements that leave the successor unable to find the family.

Each of these can be mended with a short amendment or a supplementary schedule, provided it is done before the event. After the event, the same fixes are more expensive in time and sometimes in court proceedings.

Keeping the plan alive

A continuity plan is not a document you write once. People move, firms are sold, banks change their rules and families grow. Review the plan at a regular rhythm set in the deed, and also whenever one of the following occurs: the trustee firm changes ownership, the key individual changes, the settlor moves country, a beneficiary reaches a new stage of life, or the trust acquires a new kind of asset. The page on when the settlor moves country is a useful companion when the family's situation is changing.

Where the trust has fallen out of regular attention, the situation described in a trust nobody has looked at for years is a common starting point. In such cases, a review of the continuity provisions is often the first practical step, ahead of any decision on whether to change trustee.