Changing trustee myths: what is true before you decide to stay

Changing trustee myths are rarely spread by bad faith. They come from half-remembered stories, from an old trustee who prefers to keep the mandate, or from an adviser who has never run a transition. The result is the same: families put up with slow answers, thin reporting or a distant relationship because they believe the exit is closed.

This page takes each belief we hear from clients and sets it against how a change of trustee actually works when the trust is administered from Switzerland. It is general information, not advice: the answer for your trust depends on the trust deed, the governing law, the assets and where the people involved live.

"You need a court to change a trustee"

A court is one route, not the only one. In most well-drafted trusts the trust deed says who may remove a trustee and who may appoint the next one. Often that power sits with the settlor, a protector, or a majority of adult beneficiaries. When the power exists and is used correctly, the change is documented privately in a deed of retirement and appointment, and the old trustee steps aside by signing it.

The court becomes relevant when the deed is silent, when the person holding the power is unavailable, or when the outgoing trustee refuses to cooperate and the deed gives no clean way round it. Even then, the first step is usually a careful reading of the deed and the governing law, not litigation.

Short answer to give a client: check the deed first. If it names a person with the power to replace the trustee, no court is needed. If it does not, the options are narrower and worth a proper review before anyone gets angry.

See changing trustee step by step for the usual order of work, and the glossary entry on the deed of retirement and appointment for what that document does.

"You lose the history of the trust"

The history belongs to the trust, not to the trustee. Minutes, distribution decisions, account statements, correspondence with the settlor and any letter of wishes are part of the trust's records, and an outgoing trustee is expected to hand them to the successor. A well-run handover is, in fact, the best moment to see the history clearly, because every gap becomes visible when a new trustee asks for the file.

What can be lost is not the history itself but the quality of it. If the former trustee kept poor records, the incoming trustee will report the gaps rather than hide them. That is uncomfortable, but it is better to learn it now than when a bank, an authority or a beneficiary asks the question.

A practical way to prepare is to assemble the paperwork before you announce anything. Our documents to gather before changing trustee and the handover file from the outgoing trustee list what a complete file looks like.

"It costs everything"

This is the myth that does the most damage, because it is half true for the wrong reasons. A transition does involve work: reviewing the deed, onboarding the new trustee, updating bank records and retitling or re-documenting assets where needed. But "everything" is not an honest description of any of that.

Three points are worth separating:

• The cost of the change is a one-off. The cost of staying with an unresponsive trustee runs year after year, usually in lost opportunities, avoidable errors and the time of the family.
• Costs depend on the structure. The number of assets, banks and entities, and how clean the records are, drive the work. A trust with orderly files moves far more simply than one with missing minutes.
• Fees are set after assessment. No honest provider can quote for a transition without seeing the structure. Fee levels are discussed once a confidential assessment has been made. For the models you may meet, see how trustees are paid.

The better question is not "what does the change cost?" but "what does the current arrangement cost us in risk?" An independent review of the existing trust answers that before you commit to anything.

"A trust created elsewhere cannot move to Switzerland"

A trust is not tied to the place where it was first set up. Switzerland recognises foreign-law trusts under the 1985 Hague Convention, and a trustee acting here may administer a trust governed by another law, if the deed and that law allow the change of trustee. What matters is the trust deed, the governing law and the willingness of the incoming trustee to accept the mandate after its own checks.

Switzerland has also built a regulatory frame for professional trustees. Under the LEFin (FinIA), a person who professionally manages a separate estate for a beneficiary or for a defined purpose under a trust deed within the meaning of the Hague Convention is a trustee, and trustees are financial institutions that need FINMA authorisation. That is a reason to ask for the approval, not a reason to think the move is impossible. The practical steps are set out in moving a trust to a trustee in Switzerland.

"A Swiss trustee is just another name on the letterhead"

The regulatory frame is real. A trustee based in Switzerland must be a sole proprietorship, a commercial company or a cooperative entered in the commercial register (Art. 18 LEFin). The trustee must manage the separate estate, preserve its value and use it for its purpose (Art. 19 para. 2 LEFin). The FINMA grants the authorisation, while day-to-day verification is carried out by a supervisory organisation that is itself authorised and supervised by FINMA, and changes in the facts must be reported to that body in advance.

None of this makes a trustee good or bad. It gives you something to check. The guide to FINMA and SO-FIT approval explains what to ask for and how to read the public lists.

"Changing trustee means a family war"

Some changes follow a conflict. Many do not. Families change trustee because a founder has sold a company, because an individual trustee has retired, because the settlor has moved countries or because the beneficiaries have grown up and want better reporting. A good transition is a quiet administrative event.

Where there is friction, it helps to compare the options honestly. Switch trustee or stay and fix the relationship sets out when a reset is enough and when only a change will do, and replacing a failing trustee covers the harder cases.

Myths and facts at a glance

A reply you can give in three lines

Example: a family established in Lausanne hears from their current trustee that a change would need a court and would lose years of records. A fair reply is:

1. Please send us the trust deed and the list of who holds the power to appoint and remove a trustee.
2. Please confirm in writing which records you will hand over and in what form.
3. We will decide after an independent review, not before it.

That reply is polite, it asks for nothing the trustee is not already required to provide, and it shows quickly whether the obstacles are real. Answers to related questions are collected in changing trustee: questions answered.