Using a trustee in Switzerland: a plain client guide

If you are looking for a trustee in Switzerland, you are probably not asking an abstract legal question. You want to know who will hold the assets, who answers your questions, what happens at the first meeting and what your own role is afterwards. This guide answers those practical points in plain language, for settlors, beneficiaries, advisers and family members who are meeting a trustee for the first time.

It is general information, not advice. Almost every answer below depends on where you live, where the beneficiaries live, what the trust owns and which law governs the trust deed. An individual analysis is what turns the general picture into a decision.

What a trustee in Switzerland actually does for you

A trustee is the legal holder of the trust assets. Under the Hague Trust Convention, the assets form a separate fund, the title stands in the name of the trustee, and the trustee must manage the assets and account for them. The settlor, who creates the trust, decides the purpose in the trust deed. The trustee then carries it out, for the beneficiaries or for a stated purpose.

In daily practice, this breaks down into a handful of jobs:

• Holding and safeguarding. The trustee keeps the trust property apart from his or her own wealth and from the settlor's, and signs for the trust at banks, registries and counterparties.
• Administering. The trustee keeps the records, takes and minutes decisions, follows the investment approach agreed in the deed, and keeps the trust's accounts.
• Deciding on distributions. In a discretionary trust, the trustee weighs requests from beneficiaries against the deed and the settlor's wishes. In a fixed interest trust the deed does more of the deciding.
• Complying. The trustee carries out identification and anti-money-laundering checks (AMLA, in German GwG), handles automatic exchange of information (AEOI, also called CRS) and keeps the paperwork that supervisors and banks expect.
• Reporting to you. A good trustee tells the people entitled to hear what is happening, in a form they can read.

For a deeper look at the routine, see day-to-day trust administration and what a trustee owes the beneficiaries.

What a trustee is not

A trustee is not your investment adviser by default, not your tax adviser, not a nominee who signs whatever is put in front of them, and not the owner of the assets in an economic sense. The trustee owes duties to the beneficiaries and to the purpose of the trust, and those duties can limit what the trustee is willing to do for you, even when you created the trust.

Who is in the room

A trust relationship rarely involves only two people. Understanding the cast helps you see why a trustee asks the questions it does.

The role of the protector deserves its own discussion. If your structure includes one, working with a protector explains the powers and the limits in daily practice, and the trustee, protector and beneficiary triangle shows how the three relate.

Why the Swiss setting matters to a client

Switzerland has no domestic law of trusts of its own, but it has been party to the Hague Convention on the Law Applicable to Trusts and on their Recognition for years. The Convention is dated 1 July 1985. Switzerland signed it on 3 April 2007 and ratified it on 26 April 2007, and it entered into force for Switzerland on 1 July 2007. The Federal Office of Justice confirms that foreign trusts have been recognised in Switzerland since that date. In the Swiss federal compilation the Convention is classified as RS 0.221.371.

For you as a client, four points follow from the Convention, and they explain much of what a Swiss trustee will ask you.

1. The governing law is chosen, not assumed. Articles 6 and 7 say that a trust is governed by the law the settlor chose, expressly or by implication. If no law was chosen, or the chosen law does not know the trust, the law with the closest connection applies. That connection looks at the place of administration, the location of the assets, the residence of the trustee and the purposes of the trust. This is why counsel for the governing law matters at the start.
2. Recognition has a minimum content. Article 11 says a validly created trust is recognised as a trust, which at least means the trust assets are separate from the trustee's personal estate and the trustee can sue and be sued in that capacity.
3. Recognition has limits. Article 13 says a state is not obliged to recognise a trust whose significant elements, other than the choice of law, the place of administration and the trustee's habitual residence, are connected essentially with states that do not know the trust.
4. Mandatory local rules still apply. Article 15 keeps the mandatory rules of the forum, for example on the protection of minors and incapable persons, the effects of marriage, succession rights, the transfer of title, the protection of creditors and good-faith third parties.

None of this makes a trust a shield without limits. It means a trust set up and administered with care is understood by Swiss banks, courts and authorities, and that a trustee should be able to explain in plain terms where recognition is solid and where it is open to question for your case. If you hold a trust created elsewhere, see bringing a foreign trust into trusteeship in Switzerland.

Authorisation and supervision: what you can ask to see

Professional trustees in Switzerland fall within the financial-services framework under the FinIA (in French LEFin, in German FINIG). A trustee working on a professional basis is supervised through an authorisation by FINMA, the Swiss Financial Market Supervisory Authority, and affiliation with a supervisory organisation, often called an SO. You are entitled to ask a trustee which supervisor applies, what the authorisation covers and whether it matches the services you are asking for.

Do not treat this as a box to tick once. FINMA and SO-FIT: what trustee approval means for you explains what authorisation tells you and what it does not. Authorisation shows that a framework applies; it does not say whether this trustee suits your family. For that, use due diligence on your trustee.

Before the first call: what to prepare

The first call is short and cheap in the sense that nobody commits to anything. It still goes better if you arrive with a few facts in hand. You do not need perfect documents, only an honest outline.

• Write down, in a few sentences, what you want the trust to achieve and for whom
• List the countries where you, your spouse or partner and the likely beneficiaries live or hold citizenship
• Note the kinds of assets you expect to place in the trust: cash and securities, a company, property, art, digital assets
• Say whether a trust already exists, and if so who the current trustee is and where the deed is kept
• Name the advisers who already work for you, such as a lawyer, accountant or private banker
• Think about who might act as protector, and whether you want to keep any powers yourself
• Be ready to explain where the assets came from, because the trustee must understand this before accepting them
• Decide how much you want the family to know at this stage

If you are an adviser or family office calling for a client, say so at the start and say whether the client knows you are calling. A trustee will usually need to speak to the future settlor in person before accepting any role.

The agenda of a first meeting: an example

The following is an illustration only, built on a fictional family. A couple established in Lausanne, with adult children in two different countries, want to put a family company and a securities portfolio into a trust. They have had a first call and now meet a corporate trustee in Geneva, with their lawyer attending.

A typical agenda looks like this:

1. Introductions and roles. Each person says who they are and why they are there. The trustee explains what the firm does and does not do, and which part of the work belongs to the lawyer.
2. The family picture. Who is in the family, who might benefit, any special needs, any second marriages, and any expectation that the children will not agree.
3. Objectives. Continuity of the company, fair treatment of the children, protection against a future dispute, support for a relative who cannot manage money. The trustee asks which of these is a priority when they conflict.
4. Assets and their origin. What would go in, how it is held today, and what documents support its origin.
5. Governing law and structure. The lawyer sets out the options for the governing law and for the deed. The trustee explains what that choice means for administration in practice.
6. Roles inside the structure. Whether to appoint a protector, which powers the settlors want to keep, and whether a letter of wishes will accompany the deed.
7. Compliance steps. Identification of everyone involved, the questionnaire on beneficial ownership, and the information that will be reported each year.
8. Working arrangements. Who the day-to-day contact is, how often you will be updated, how decisions are minuted, how requests for distributions are made.
9. How the relationship is paid for. The trustee explains the fee model in principle. Amounts depend on the structure and are indicated after a confidential assessment.
10. Next steps. What each side will send, who drafts what, and a realistic order of work.

Expect the trustee to ask more than you expected and to promise less than you hoped. Reluctance to commit before knowing the facts is a good sign, not a bad one. The reverse should worry you: a trustee who accepts everything at the first meeting has not done the work.

For a fuller tool, the trustee due diligence questionnaire lists questions you can put to any candidate.

The client path from first call to steady state

The route is usually the same in outline, even when the details differ. The diagram below shows the sequence; the paragraphs after it explain each stage.

Confidential assessment

After the first call, you can ask for a confidential assessment. This is where the trustee looks at your facts and tells you whether it can act, and under what conditions. It is also the point at which the fee model is explained, based on the structure and the work it will involve. Nothing is quoted before the trustee understands what you want.

Acceptance checks

A responsible trustee runs checks before agreeing to act. These cover the identity of everyone involved, the origin of the assets, any risk under the anti-money-laundering rules, and whether the trustee can serve the purposes you describe without a conflict. A refusal at this stage is not a failure on your part. Sometimes a different structure or a different kind of trustee is simply a better match.

Structure and deed

The lawyer drafts the deed under the governing law you chose, and the trustee comments on how workable it is. This is a good moment to decide on reserved powers, the powers of a protector, the way replacement of the trustee will work and the standard of liability. The trustee has to live with the deed for years, so its comments are worth hearing, but the choices stay yours. See settlor reserved powers and the trustee relationship before you decide how much control to keep.

Funding and onboarding

A trust that is signed but not funded is only a document. Funding means transferring each asset so that the title stands in the name of the trustee, which may involve a bank, a company register, a land registry or a custodian. The trustee then opens the accounts and sets up registers and reporting. Your trustee and the trust bank accounts explains what banks ask for and why.

The first year

The first year is a testing period. Decisions are made, minuted and explained, and both sides learn how the other works. Raise any friction early. A small misunderstanding about how requests are made is easy to fix in the first months and harder after years of habit.

Steady state

Once routines settle, a good relationship looks quiet. You receive reports on time, requests are answered within a reasonable time, and the trustee raises issues before they become problems. Reviews happen on a rhythm, and again when life changes: a marriage, a move abroad, a sale of the business, a death. The annual trust health check is a simple tool to use at each review.

What a good relationship looks like

You cannot judge a trustee by a brochure. These signs matter more:

On continuity in particular, see continuity planning when the trustee is not there. If you already have a trustee and feel some of the warning signs, replacing a failing trustee sets out how to approach it.

Your own part in the relationship

A trust works better when the settlor and family play their part. That mostly means three things.

Be accurate. Give full information, including the awkward parts. A trustee who learns of a second family, an old dispute or a foreign tax issue late has to reopen decisions already taken.

Keep the line between wishes and instructions. Settlors often keep a voice through a letter of wishes, which a trustee considers but is not bound by. If a settlor starts to give instructions as though still the owner, the trust's separation of assets can be questioned. Letters of wishes and your trustee covers how to keep the letter useful and up to date.

Tell the trustee when life changes. A move to another country, a divorce, a new business, a child with a health problem: each can change how the trust should be run. When the settlor moves country explains why the trustee wants to hear early.

Choosing between candidates

Most clients speak to more than one trustee. Treat these conversations as a comparison on a few criteria and keep notes in the same format, so you can compare later. The method in how to choose a trustee in Switzerland gives a structured way to do this. If you are still undecided between a person and a firm, read individual or corporate trustee as well.

A few questions bring most differences to the surface:

• Who will actually deal with my file, and what happens when that person is away?
• Which decisions does the trustee take alone, and which does it bring back to the settlor or protector?
• How are conflicts of interest identified and handled?
• What reports will we receive, how often, and in what form?
• How does the trustee handle a request from a beneficiary that the settlor would not have wanted?
• What happens if we want to leave?

The last question is a useful test. A trustee confident in its service will answer it openly, and the answer tells you how hard a future change would be.