A Brazilian resident settlor and a trustee in Switzerland

A Brazilian resident settlor who works with a trustee in Switzerland is in a three-cornered relationship: you, a trustee in Geneva, and advisers at home who know Brazilian law, tax and family circumstances. The trustee can only do its part well if each corner supplies what the others cannot. This page explains what a Swiss trustee needs from you and your local advisers, how contact runs through the first year, and which questions it will deliberately leave to Brazil.

It is general information, not advice. Brazilian recognition and tax are flagged here, not answered. They depend on your residence, nationality, family and assets, and they belong to an adviser qualified in Brazil.

What the trustee does, and what it does not

A Swiss trustee administers the trust under the governing law chosen in the trust deed, keeps the trust assets apart from its own, takes decisions in the interest of the beneficiaries, and accounts for what it does. It is supervised as a financial intermediary in Switzerland, and it carries anti-money-laundering duties that apply whatever the settlor's country. To see what the approval means in practice, read FINMA and SO-FIT: what trustee approval means for you.

It does not give Brazilian legal or tax advice, and it does not decide for you whether a trust fits your family's situation at home. That division is not a limitation to work around. It is the reason the trustee asks for named Brazilian advisers early.

Who talks to whom

The diagram shows the usual flow. You remain the instructing party and the source of the story; the local adviser translates Brazilian requirements into questions and documents; the trustee turns the answers into a structure it can administer and report on.

The key habit is that the trustee and the local adviser should be able to speak to each other, with your consent, rather than only through you. Passing messages along loses detail on both sides, and in a cross-border structure the detail is usually where the difficulty sits.

What the trustee will ask you for

Expect the first requests to be factual and, to a settlor used to a more informal approach, thorough. A regulated Swiss trustee must know who stands behind a structure.

• Identity and residence. Identity documents, proof of address in Brazil, and any other tax residence or nationality you or your family hold.
• Source of wealth and of the assets to be settled. An account of how the wealth arose and documents that support it. Business sales, inheritances and property sales each have their own paper trail.
• The people involved. Who the beneficiaries are, where they live, and whether any of them is a minor, has a disability, or lives in a third country. See trustee care for vulnerable and blended-family beneficiaries for how that changes administration.
• Your objectives, in your own words. Continuity, protection from family disputes, orderly succession, support for particular relatives. The trustee tests the plan against what a trust can and cannot do.
• Any reserved powers you want. The Hague Convention accepts that a settlor may reserve certain powers without that being incompatible with a trust. How far to go is a design question, covered in settlor reserved powers and the trustee relationship.

What the trustee will ask your local advisers for

This is the part most settlors underestimate. The trustee does not need your adviser to run the structure. It needs your adviser to put specific points in writing so that the trustee does not guess.

Please treat the table as a list of questions, not as a statement of the Brazilian answers. This site does not state Brazilian law or tax; a qualified Brazilian adviser should confirm every point in writing.

Why local recognition and mandatory rules are flagged

Two points from the Hague Convention explain why the trustee keeps asking about Brazil.

First, Switzerland recognises trusts under the Convention, which entered into force for it on 1 July 2007. A trust valid under its governing law is recognised as a trust, which at a minimum means the trust assets are separate from the trustee's personal estate and the trustee can sue and be sued in that capacity. That is the Swiss position, set out in the Convention and the federal justice office's guidance.

Second, that Swiss recognition does not bind other countries' courts or authorities in every respect. The Convention lets a state decline to recognise a trust whose significant connecting elements, apart from the chosen law, the place of administration and the trustee's habitual residence, lie essentially in states that do not know the trust. It also leaves mandatory rules of the forum in place: protection of minors and those lacking capacity, the effects of marriage, inheritance rights, transfer of title, protection of creditors and of good-faith third parties.

For a settlor in Brazil, that means a Swiss trust, however properly run, may meet local rules on family property, forced heirship or creditors that the Swiss trustee cannot assess. Only Brazilian counsel can say how those rules treat the trust. The trustee will want the answer in writing, because it may change the deed or the assets that are settled.

Governing law is a separate choice

The trust is governed by the law you choose, expressly or by implication. If you choose none, the Convention looks to the law with which the trust is most closely connected, taking account of the place of administration, the location of assets, the trustee's residence and the purposes of the trust. If the chosen law does not know the trust, the choice has no effect and that fallback applies.

A Swiss trustee can act under a foreign governing law, and the choice of law is often made with counsel who know it. The trustee's role is to confirm that the structure can be administered in Geneva and that the deed matches what the family intends. For the first steps, see appointing a trustee when you set up a new trust.

Swiss tax treatment is only part of the picture

The Swiss federal tax authority has published how trusts are treated for Swiss tax. In summary, a revocable trust is looked through, so the assets and income stay taxable with the settlor. In an irrevocable discretionary trust, where the settlor was domiciled abroad when it was created, the assets are attributed neither to the settlor nor to a beneficiary. That is a Swiss statement only. It does not say how Brazil treats the same trust, and a Swiss outcome is not evidence of a Brazilian one.

Do not carry a conclusion from one country's rules into the other. Ask the Brazilian adviser the question on its own terms. The distinction between trust types is explained in the trustee role in revocable and irrevocable trusts.

A first-year calendar of contacts and reports

Example: a family from Brasília sets up a discretionary trust with a Geneva trustee. The names are invented and nothing here describes a real client. The sequence is typical of how contact might run, without fixed dates.

Most of these contacts are light. The heavy lifting is at the start, when the trustee and adviser align, and at year end, when the trustee reports. Between them, tell the trustee promptly if your circumstances change: a move, a marriage, a new child, a sale of a business. These matter because the trustee must update its records, and some may change what the trustee can do. See also when the settlor moves country.

Practical habits that make the relationship work

• Name one point of contact on each side and agree how messages reach the other two.
• Keep the Brazilian advice in writing, dated, and shared with the trustee with your consent.
• Treat the letter of wishes as a living document and update it as the family changes, as explained in letters of wishes and your trustee.
• Ask how the trustee will report to you and how often, before the structure is funded.
• If you are comparing candidates, use how to choose a trustee in Switzerland and the due diligence questionnaire.

Fees depend on the structure and are discussed after the confidential assessment; this page does not state them.