Questions About Trust Jurisdiction to Ask Your Counsel

Most disappointments with a trust do not come from the trust deed itself. They come from the place where the trust is governed, supervised and, one day, ended. The questions about trust jurisdiction below are meant to be read before a first meeting with counsel, so that the conversation covers the legal system rather than only the drafting. The answers always depend on your residence, your beneficiaries and the assets involved, which is why each question deserves an individual analysis.

Why the seat deserves its own set of questions

A trust is not a company with a register entry that settles everything. Its behavior depends on the law that governs it, the courts that will hear disputes, the authority that supervises the trustee and the rules for leaving. These four elements can sit in different countries, and counsel who knows only one of them will tend to recommend it. Asking structured questions makes the gaps visible.

The steps below follow the order in which most families meet the issues.

Questions on the governing law

Start with the law, because it determines what the trust can lawfully do. A useful first step is to separate the governing law from the seat of administration, since the two are often confused.

• Which law governs the trust, and is that choice written into the deed?
• Does that law recognize the trust, and does the seat's own legal system recognize it? Counsel should explain the role of the 1985 Hague Convention, and what happens if a country involved is not a party. The explainer on the Hague Trusts Convention gives the background.
• How does that law treat discretionary, revocable and irrevocable features, and what powers may the settlor keep without putting the trust at risk?
• What does the law say about creditor claims and about heirs in your country? Forced heirship rules can reach assets placed in a trust, and the answer differs by country, as set out in the page on forced heirship and trusts.
• Is the law stable, or has it changed recently in ways that could change again?

If counsel answers all of these with the same sentence, ask for the reasoning behind each one.

Questions on courts and enforcement

A good governing law is only as useful as the court that applies it. Ask where a dispute would be heard, in which language, and by judges who see trust cases regularly.

• Which courts have jurisdiction over the trust, the trustee and the beneficiaries?
• Would a judgment from the seat be recognized where the assets or the family are? See the overview of courts, enforcement and foreign judgments.
• Can a foreign court override the chosen law, and under what conditions?
• Is there a record of the seat's courts upholding trusts against challenges?

Example: a family established in Lausanne, with a child living abroad and property in a third country, may find that three different courts could each claim a role. Counsel should map them before the seat is chosen, not after a dispute begins.

Questions on regulators and the trustee

Seats differ sharply in how professional trustees are authorized and watched. In Switzerland, the rules sit in the Financial Institutions Act (FinIA, or LEFin in French). It lists trustees among financial institutions, alongside asset managers (Art. 2 para. 1 let. b). It defines a trustee as anyone who, on a professional basis, manages a segregated estate or disposes of it for a beneficiary or a set purpose, on the basis of a trust deed within the meaning of the 1985 Hague Convention (Art. 17 para. 2).

A few features of that regime illustrate the kind of detail worth asking about in any seat:

Professional activity, in the Swiss definition, means an independent economic activity carried out to earn regular income (Art. 3). That matters when a family asks whether a friend or relative could act as trustee, because the regulatory answer can differ from one seat to another.

Beyond the table, put these questions to counsel:

• What does supervision mean in practice: inspections, reporting, sanctions?
• Does the regulator protect beneficiaries, or mainly the financial system?
• How does a regulated seat compare with a lightly regulated one?
• If a protector or reserved powers are used, how does the seat's law treat them? The page on protector law by jurisdiction shows how much this varies.

For a Swiss-specific view of the strengths and limits, see Switzerland as a trust seat.

Questions on reporting and privacy

Reporting is where the practical day-to-day burden sits. Ask what is filed, with whom, and who can see it.

• Is there a trust register, and who has access to it? Compare the answers in trust registers and privacy.
• Which automatic exchange of information rules (CRS, AEOI) apply to the trust or its bank accounts?
• Are accounts to be prepared, audited or filed each year, and by whom?
• What anti-money-laundering duties (AMLA) fall on the trustee, and what will you be asked to provide?

Counsel should be able to say what is disclosed to authorities and what remains confidential, without implying that confidentiality is complete.

Questions on exit

Exit is the question most often left until it is urgent. Raise it first, not last.

• Can the trust be moved to another seat, and what does the deed need to say to allow it?
• What are the duration limits under the governing law?
• How is the trust wound up, and what happens to the assets on the way out?
• Which events (a change of residence, sanctions, a banking difficulty, a change in law) should trigger a review? The guidance on winding up and exit by seat covers the legal side.

Checklist to bring to the meeting

• Write down your objectives, your countries of residence and the assets to be placed
• Ask which law governs the trust and why it was chosen
• Ask whether the seat and every country involved recognize the trust
• Ask where disputes would be heard and how judgments would travel
• Ask who supervises the trustee and what authorization it requires
• Ask what is registered, reported and exchanged, and what stays private
• Ask how the trust can be moved, reviewed and ended
• Ask what the main risks are, including those that counsel would rather not discuss
• Ask what each answer would change if your residence or family changed

The most common slips are described in common mistakes when choosing a seat, which is worth reading alongside this list.