Trustee due diligence: what to check and ask before and after you appoint

Trustee due diligence is the work of confirming, with evidence rather than reassurance, that the person or company holding your trust assets is authorised, competent, properly run and able to keep going. It applies to a trustee you are about to appoint and, just as much, to one who has been in office for years. Most families do the first kind once, if at all, and the second kind never.

This guide sets out what to check, where each answer should come from and which responses are warning signs. It ends with a request letter you can adapt and send. It is general information, not advice on your own structure; what matters most depends on where you live, who the beneficiaries are and what the trust owns.

What trustee due diligence is really for

A trustee holds legal title to assets for the benefit of others. The settlor, the protector and the beneficiaries all depend on one party behaving correctly, often out of sight. Due diligence replaces trust in a reputation with a small set of facts you can verify.

It answers four plain questions:

• Is the trustee entitled to act? Authorisation, supervision and the status of the people involved.
• Is the trustee run properly? Governance, records, accounts, and the way decisions are taken and written down.
• Can the trustee keep going? Depth of the team, insurance, financial strength and a plan for the day a key person is unavailable.
• Does the trustee treat people fairly? Complaints, disputes, references and the way the trustee deals with beneficiaries.

None of these can be settled by a brochure. Each one maps to a document, a register entry or a conversation, and the rest of this guide follows that logic.

If you are still choosing, read this page alongside how to choose a trustee in Switzerland. If the trustee is already in place, the same checks work as the first stage of an independent review of an existing trust.

Start with the legal footing

Authorisation and supervision

In Switzerland, professional trustees fall within the financial-services framework. Under the Anti-Money Laundering Act (AMLA), asset managers and the trustees referred to in Article 2 paragraph 1 letters a and b of the Financial Institutions Act (FinIA, in German FINIG, in French LEFin) are financial intermediaries. In practice this means a professional trustee is expected to be authorised and to sit under supervision, normally through FINMA and a supervisory organisation.

Your first checks are therefore simple:

• Ask for the exact legal name of the entity that will act as trustee, not a trading name or a group brand.
• Ask which authority authorised it and which supervisory body oversees it.
• Look the entity up on the official FINMA register and compare name, address and status with what you were told.
• Ask whether the authorisation covers the trustee activity itself or only a related activity such as asset management.

A fuller explanation of what approval does and does not tell you is in FINMA and SO-FIT: what trustee approval means for you. Approval is a floor, not a quality mark. It tells you that a regulator has looked at the firm; it does not tell you that the firm suits your family.

Commercial and transparency registers

Check the commercial register entry for the trustee company: who is registered, who can sign, what the stated purpose is and whether anything has changed recently. A company whose purpose clause has nothing to do with trustee work, or whose signatories differ from the people you have met, deserves a question.

A new federal transparency register has also entered the picture. The law on the transparency of legal entities came into force on 1 October 2026 and the register, kept by the Federal Office of Justice, started on that date. The time allowed for notification ranges from one month to two years depending on the entity, and a supervisory authority within the Federal Department of Finance checks the data.

Be careful about what you conclude from this. The official announcement speaks of legal entities and legal persons; it does not mention trusts. So do not assume that your trust, or the trustee's own affairs, appears in this register. A better question is: which companies in the structure, such as an underlying holding company or the trustee entity itself, are subject to notification, who reported them and when? Ask for the answer in writing.

The trustee as a financial intermediary

Because a professional trustee is a financial intermediary, the AMLA obliges it to do several things that you can use as a checklist of its own housekeeping:

• verify the identity of the contracting party when a business relationship starts, on the basis of a supporting document (Article 3);
• identify the beneficial owner with due diligence, and obtain a written declaration where the contracting party is not the beneficial owner or where there is doubt (Article 4);
• keep and retain documents (Article 7);
• take organisational measures so that the rules are actually applied (Article 8).

A trustee that treats these as an annoyance, or that cannot tell you how it applies them, is telling you something about its culture. See compliance and reporting: what your trustee must do for the day-to-day picture.

The checks at a glance

The table below groups the main checks. Use it as a working sheet: for each line, note the evidence you received and the date.

Accounts, statements and records

Accounts are where a trustee's quality shows most clearly, because they turn many small decisions into one document. Ask for the last set of trust accounts and read them with these questions in mind.

• Do the accounts reconcile to independent evidence? Bank and custody statements should be addressed to the trust, through the trustee, and the totals should match the accounts at the same date.
• Is the method stated? A set of accounts that does not say how assets are valued, or which currency is used, cannot be compared year on year.
• Are loans, distributions and fees visible as separate lines? Anything bundled into a single heading is hard to check.
• Were the accounts delivered on time and explained? Lateness is rarely one-off. It usually points to thin staffing or poor records.
• Is there an audit or independent examination where the deed or the structure calls for one? If not, ask why.

Then ask to see how decisions are recorded. A well-run trustee keeps minutes or written resolutions for distributions, investments, loans to beneficiaries and changes to the structure, each linked to the reason and to the relevant clause of the trust deed. A missing paper trail is more common than people expect, and it is the single most frequent finding in reviews. One illustration is in the case where an independent review reveals missing minutes.

Also ask how long records are kept and where. The AMLA requires documents to be established and retained, but your concern is wider: records of decisions should outlast any one employee and any one banking relationship.

Fees without figures

Do not treat remuneration as a due diligence item in the narrow sense, but do check that it is understood. You want to see how the trustee charges, what is covered, what is billed separately and how changes are notified. Fees depend on the structure and are indicated after a confidential assessment, so any comparison has to be like for like. The models are explained in how trustees are paid. A trustee who cannot describe its own charging basis in plain words is a risk, whatever the level.

Key people

Trusts are administered by people, even when the trustee is a company. Many problems start with a dependence on one individual who has the relationship, the knowledge and the habit of deciding alone.

Ask for:

• the names and roles of the people who will actually work on your trust, not only the senior name you met;
• how long each of them has been with the firm;
• who deputises when the main contact is away, ill or has left;
• who has authority to sign, and whether any decision needs two people;
• how files are handed over when a relationship manager changes.

Then ask the more uncomfortable question: what happens to my trust if the person I deal with leaves next month? A mature trustee has an answer that involves named colleagues, shared files and a documented process. An immature one answers with confidence in a person. The topic is developed in continuity planning when the trustee is not there, and the individual-trustee version is in the case of an individual trustee who falls ill.

Ownership and independence

Find out who owns the trustee company and whether it is part of a wider group that also sells banking, investment or legal services. Ownership is not a problem in itself, but you should know whether the trustee might be tempted to steer assets or advice towards a related business. Ask how conflicts are identified, recorded and handled, and whether the trustee will tell you in writing when one arises.

References and track record

References have value only when they are independent. A list supplied by the trustee is a list of satisfied clients, which is not the same as a fair sample.

Better routes:

• ask your own lawyer, accountant or private banker what they have seen of the firm in practice;
• ask the trustee for contacts who have been through a change of trustee, a dispute or a difficult distribution, and who are willing to speak about it;
• ask how many trusts are administered per professional and how long a typical relationship lasts, then note whether the answer is specific or evasive;
• ask what the trustee does when a beneficiary disagrees with a decision.

You are listening for concrete detail: how a problem was found, who raised it, how long it took and what changed afterwards. Praise without detail tells you very little. If you are weighing several candidates side by side, the case of a founder who scores three candidate trustees shows one way to keep the comparison fair.

Insurance and financial strength

A trustee can make a mistake, miss a deadline or be misled. Whether you can recover anything then depends partly on insurance and partly on the trustee's own resources.

Ask for evidence of professional indemnity cover, and look at four things: who the insurer is, which activities are covered, what the cover period is and whether the policy covers the trustee entity that actually holds your trust. A letter from a broker confirming cover is a reasonable request; a refusal on grounds of confidentiality is not.

Cover has limits, and you should not read it as complete protection. Policies have exclusions and thresholds, and a claim is a process, not a cheque. What the evidence does tell you is whether the trustee takes its own risk seriously.

Add a question about financial strength: whether the trustee entity has its own capital, whether it is audited and whether it depends on one client or one banking partner. A small firm can be excellent, but dependence on a single source of income is a risk you should know about.

Complaints, disputes and conduct

Ask how the trustee handles complaints and whether it keeps a written procedure. You want to know who receives a complaint, who is independent of the person complained about, what timing the trustee sets itself and what happens if you remain dissatisfied.

Also ask, directly, whether the trustee or its principals have been subject to supervisory measures, disciplinary findings or litigation connected with trust work. A professional answer is calm and specific. An evasive one is information too.

Consider how the trustee behaves when asked a difficult question. Trustees owe duties to beneficiaries, and a trustee that bristles at a reasonable request for information is showing you how it will react later. What a trustee owes the beneficiaries and the information your trustee must give you explain what you are entitled to expect, and a dispute between beneficiaries and the trustee describes what happens when it goes wrong.

Reporting and tax transparency

Ask the trustee to explain, in terms you can follow, how it deals with automatic exchange of information (AEOI) and the Common Reporting Standard (CRS), and with any other reporting that applies to a settlor or beneficiary in your situation. You are not asking for tax advice. You are checking that the trustee has a process, knows which of your connections matter and can tell you what will be reported before it is reported.

Two warning signs: a trustee that answers every tax question with "that is for your adviser", and a trustee that offers certainty about outcomes. Reporting duties depend on residence, the type of trust and the status of the people involved, and the honest answer is that they need individual analysis.

Example: a check that reveals a key-person risk

An illustration, not a real case. A family established in Lausanne has had a corporate trustee in Geneva for many years. The settlor is elderly and the children want to understand the arrangement. They ask for a short due diligence pack: commercial register extract, organisation chart, the last accounts, evidence of insurance and the names of everyone who works on the trust.

The accounts are in order. The insurance is current. The register extract, however, shows a single signatory with sole authority, and the organisation chart shows that this person is also the only one who has ever spoken to the family. Asked who would step in, the trustee names a colleague whom the family has never met and who has not read the file.

Nothing is wrong yet, and nobody has behaved badly. But the check has exposed a key-person risk: the trust's continuity rests on one individual's health, availability and willingness to stay. The family does not need to change trustee. It can ask for a second named contact, a written handover note and a joint meeting with the colleague, and it can ask the trustee to confirm in writing that decisions of a certain weight need two signatures. If the trustee refuses, the family has learned something more serious, and can look at whether to switch trustee or stay and fix the relationship.

A request letter you can send

The letter below works for a candidate trustee or an existing one. Edit it to fit, keep it polite and keep a copy. It contains no contact details on purpose; send it through the channel you already use.

Subject: Request for information about the trusteeship of [name of trust]

Dear [name],

I am writing to complete my records on the trusteeship of [name of trust] and, where relevant, to prepare a decision about [appointing / continuing with] your firm. I would be grateful for the following, in writing, by [date]:

1. The exact legal name of the trustee entity, the authority that authorised it and the supervisory organisation it belongs to.
2. A recent extract from the commercial register for that entity, and confirmation of who may sign for it.
3. The names, roles and length of service of the people who work on the trust, and the name of the person who deputises for the main contact.
4. The latest trust accounts, a statement of the valuation method used, and the bank and custody statements for the same date.
5. Evidence of professional indemnity cover, showing the insurer, the activities covered and the period of cover.
6. A description of how decisions on distributions, loans and investments are taken and recorded, with the most recent minutes or resolutions on those subjects.
7. A summary of how the firm applies its obligations under the Anti-Money Laundering Act to this trust, including how the beneficial owner has been identified and when the file was last reviewed.
8. A description of the firm's handling of automatic exchange of information and any reporting that concerns this trust.
9. The firm's complaints procedure and confirmation of whether any supervisory measure has been taken against the entity or its principals in relation to trust activity.
10. A summary of how the firm charges for this trust, what is included and how changes are notified.

If any item cannot be provided, please tell me why. I would also welcome a meeting with the colleague who would act in your absence.

Yours sincerely, [name] [role in the trust: settlor / protector / beneficiary]

If you are a beneficiary rather than the settlor, your rights to information depend on the deed and the governing law, so the letter may need to be phrased as a request rather than an entitlement. A handover file from the outgoing trustee is a useful companion if the review ends in a change.

Reading the answers

Once the replies arrive, sort them into three groups.

Complete and clear. The trustee answered every point, with documents, in good time. This is what you want. Note any area where a document was thinner than the claim.

Complete but slow or defensive. The content is there, but you had to chase and the tone was irritated. Consider whether you are happy to deal with that attitude for years, particularly if a beneficiary may one day need information in a hurry.

Incomplete or evasive. Missing records, unclear authorisation, no insurance evidence, or answers that move the conversation away from the question. Do not fill the gap with assumptions. Ask once more in writing, and if the gap remains, take advice on whether the trustee should be replaced. Replacing a failing trustee sets out how that works, and changing trustee step by step covers the mechanics.

Repeat the exercise at a sensible rhythm rather than only in a crisis. The annual trust health check turns the central points into a short yearly routine, and the trustee due diligence questionnaire gives you a formal version to hand to a candidate.

Common weak points to keep in mind

• Relying on the brand. A well-known group may still run your trust through one overworked person.
• Checking once. Authorisation, staff and insurance change. A check made years ago says little about today.
• Confusing friendliness with governance. A warm relationship manager does not replace a minuted decision.
• Ignoring the deed. The trust deed defines what the trustee may do, who can remove it and what the settlor reserved. Due diligence that never opens the deed misses the most important document.
• Treating it as hostile. A good trustee expects questions and answers them without offence. Asking is a normal part of a mature relationship.