Case Study: Redomiciling a Cayman Trust to Switzerland

This is a fictional, anonymous case study. It illustrates how a case study on redomiciling a trust can unfold when an existing Cayman trust is moved to a trustee in Geneva. No real family, trustee or bank is described, and every detail below is invented to show the reasoning, not to predict an outcome. Your own position depends on the trust deed, the governing law, where the people involved live and what the assets are.

The fictional situation

Imagine a family, which we will call the Alvarenga family, whose founder settled a discretionary trust in the Cayman Islands some years ago. The founder, the settlor, lived abroad when the trust was created. The beneficiaries are the founder's spouse and adult children, who now live in different countries. A professional trustee in the Cayman Islands administers the trust, and the assets sit with a custodian bank elsewhere in Europe.

Three things have changed. The family's centre of gravity has moved towards Europe. The custodian bank has asked more questions about the trust than it used to. And the family would like decisions taken closer to where several of them meet. They are not unhappy with the structure itself. They want to know whether it can be administered from Geneva, and what that would actually require.

This is a different question from choosing a new seat from scratch. For that, see how to choose a trust jurisdiction. Here the trust already exists and the question is how much of it can move, and how.

The questions the family put

The family's adviser reduced the project to five questions:

• Does the trust deed allow a change of trustee or of the place of administration?
• If the governing law stays Cayman, is that compatible with a Geneva trustee?
• Which parties must consent, and in what form?
• What do the custodian bank and any other financial institutions need to see?
• What would change for reporting and records?

Each question is examined below. The answer to every one of them started with the same document.

Step one: reading the trust deed

The first task was a review of the trust deed and any later deeds of amendment or appointment. The reviewing counsel looked for four things: who holds the power to appoint and remove trustees, whether the deed expressly allows the administration to move abroad, whether a protector holds any reserved powers, and whether any letter of wishes should be read alongside the deed.

In the fictional file, the deed gave the power to appoint a new trustee to the protector, acting in writing. It said nothing prohibiting administration from another country. That is a favourable starting point, but it is not the end of the analysis. A deed can allow a change of trustee while the governing law imposes its own conditions. For the legal role of a protector, see protector and reserved powers law by jurisdiction, and for the weight of non-binding guidance, letters of wishes across seats.

Governing law and seat are two decisions

A frequent confusion in this kind of project is to assume that moving the trustee moves the law. It does not. The governing law of a trust, its proper law, is fixed by the deed. The place where it is administered, its seat, can differ. Our page on governing law versus seat of administration sets out the distinction.

In the case, the family chose to keep Cayman law as the governing law at first and to move only the trustee and the day-to-day administration. A later change of governing law was left as a separate decision, to be taken only if the deed and the original law allowed it. This staged approach keeps the first move simple and avoids mixing two legal questions in a single step.

What Swiss law provides, and what it does not

Switzerland has no trust of its own. A parliamentary motion to introduce one was filed on 26 April 2018. The Federal Council opened a consultation on 12 January 2022 and, on 15 September 2023, noted the lack of sufficient political consensus, observed that the proposed tax rules had been clearly rejected and declined to prepare a dispatch. The Council of States closed the motion on 12 December 2023 and the National Council on 27 February 2024, which ended the procedure. There is therefore no Swiss-law trust to move into.

What Switzerland does provide is recognition. It signed the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition on 3 April 2007, ratified it on 26 April 2007, and the Convention entered into force for Switzerland on 1 July 2007. The Federal Office of Justice confirms that foreign trusts have been recognised since that date. A trust governed by Cayman law can therefore be administered by a Geneva trustee and recognised as a trust. For the wider picture, see the Hague Trusts Convention explained and Switzerland as a trust seat.

The relocation steps

The structure below shows how the pieces fit together in this fictional move. The upper levels hold the decisions, the lower levels hold the work that follows from them.

The Geneva trustee does not simply accept the role. It carries out its own due diligence on the settlor, the beneficiaries and the origin of the assets before agreeing. That is a regulatory requirement for a Swiss financial intermediary, and a family should expect the questions even for a structure that has existed for years. The trust is then only moved on paper once the trustee has said yes.

Consents and who gives them

The family's adviser prepared a simple map of who must agree, and in what form.

Whether beneficiaries must consent is one of the points that varies most. In the fictional case, the deed required no beneficiary consent, but counsel advised informing the adult beneficiaries in writing so that nobody would hear of the change from a third party. If any beneficiary were a minor or otherwise vulnerable, the analysis would be different; see blended-family and vulnerable-beneficiary trusts.

Bank and custody updates

The custodian bank is often the part of a relocation that takes the longest, because the bank has its own onboarding rules. In the case, the bank required the following before it would treat the Geneva trustee as the account holder's representative:

• certified copies of the deed of appointment and the deed of retirement;
• a fresh identification file for the new trustee, its signatories and the controlling persons of the trust;
• updated declarations about the settlor, the beneficiaries and the protector;
• confirmation of the tax status of the trust for automatic exchange of information purposes;
• new signing authorities and mandate documents.

The family also asked whether the assets might move to a Swiss custodian. That is a separate decision from changing the trustee, and it brings its own questions about where assets are held and how they are reported. Those are discussed in banking and custody for trust assets by seat. Keeping the two steps apart allowed the trustee change to be completed without waiting for a bank migration.

Tax position: a point to flag, not to resolve

Swiss federal guidance on trusts treats an irrevocable discretionary trust according to where the settlor was domiciled when it was created. If the settlor was domiciled in Switzerland at that time, the assets and their income remain attributed to the settlor. If the settlor was domiciled abroad at that time, the assets are attributed neither to the settlor nor to a beneficiary. In the case, the founder lived abroad at creation, which is why counsel flagged it as relevant and then stopped. Whether it holds for a given family depends on facts and on the other countries involved, and it calls for individual tax advice before any step is taken.

Records, registers and reporting

After the appointment, the Geneva trustee takes over the trust records: accounts, minutes of past decisions, correspondence with beneficiaries, and the registers held for the trust. The outgoing trustee's duty to hand over complete records is a point to settle in the deed of retirement. The family also asked which registers or reporting obligations might change once the administration is in Switzerland. The answer differs by seat; see trust registers and privacy and trust reporting regimes compared.

Limits of this case

A fictional case cannot tell you whether your trust can move. It leaves out several matters that would change the answer: a deed that forbids a change of trustee, a governing law that requires court approval, assets in several countries, a settlor who has since changed residence, or a bank that declines the new trustee. Practical lists to work from are documents to gather for a trust relocation and the common mistakes when relocating a trust. The mechanics of moving more than the trustee are covered in moving a trust between jurisdictions.

Fees depend on the structure and are indicated after the confidential assessment.