On this page
- Mistake one: skipping the power review
- Mistake two: missing consents
- Mistake three: confusing governing law, seat and residence
- Mistake four: getting the bank timing wrong
- Mistake five: ignoring tax residence and reporting
- Mistake six: losing the records
- A short pre-move checklist
- Frequently asked questions
Moving a trust to a new jurisdiction looks like an administrative exercise: a new trustee signs, assets follow, the file changes address. In practice the mistakes made when moving a trust jurisdiction are almost always made at the start, in the reading of the trust deed, and they surface months later when a bank refuses an instruction or a beneficiary challenges a decision.
This page lists the errors we see most often when a trust is brought to a Swiss trustee, why each one is costly, and how to avoid it. It is general information, not advice: the right answer depends on the deed, the governing law, where the settlor and beneficiaries live, and what the assets are. If you are still deciding whether to move at all, start with how to choose a trust jurisdiction.
Mistake one: skipping the power review
The deed decides who may do what. Before anything else, someone has to read it line by line and answer a short list of questions. Who has the power to remove and appoint a trustee? Can the trustee be changed at all, or only by a court? Does the deed allow the seat of administration to change, and is there a flee clause that triggers automatically?
Why it costs
A move made by a person who lacks the power is open to challenge, sometimes years later and by a beneficiary who was never consulted. Some deeds also give a protector a veto or reserved powers that nobody remembers. If the protector was not asked, the appointment can be void or voidable.
How to avoid it
Commission a written power review before the new trustee is approached. It should cover appointment and removal powers, the protector's role, any restriction on changing the governing law, and any clause that conflicts with the law of the new seat. The protector and reserved powers page explains how these powers differ between legal systems.
Mistake two: missing consents
A change of trustee is rarely one signature. Depending on the deed and the law, you may need the outgoing trustee, the incoming trustee, the settlor if alive, the protector, an enforcer for a purpose trust, and sometimes adult beneficiaries or a court on behalf of minors and unborn beneficiaries.
Why it costs
A missing consent does not usually stop the process on the day. It stops it later: a bank asks for proof that the appointment is valid, an auditor asks who approved it, or a beneficiary says they were never informed. Gaps are then repaired under pressure, and sometimes cannot be repaired without a court.
How to avoid it
Build a consent matrix from the power review: one row per person, what the deed requires from them, and the evidence you will keep. Collect consents in writing and in the form the deed requires, and keep them in the transfer file. A document list helps: see documents to gather for a trust relocation.
Mistake three: confusing governing law, seat and residence
Three different things are often treated as one. The governing law (the proper law) determines the validity and effects of the trust. The seat is where it is administered. Residence is a tax and regulatory notion attached to the trustee, the settlor and the beneficiaries.
Why it costs
A family may believe it has moved the trust because the trustee now sits in Geneva, while the deed still points to a different governing law with its own rules on duration, forced heirship or beneficiary information. Switzerland has no domestic trust statute: the Federal Council decided not to bring a bill to Parliament, so a trust administered here relies on a foreign governing law and on recognition under the Hague Trusts Convention. The consequences of that are not trivial and need to be mapped in advance.
How to avoid it
Decide separately what will change: only the trustee, the seat, or the governing law as well. Read governing law versus seat of administration and confusing governing law, seat and residence before drafting the deed of appointment. If a change of governing law is on the table, the Hague Trusts Convention explained shows what recognition does and does not cover.
Mistake four: getting the bank timing wrong
Banks and custodians are often the slowest part of the process. They must onboard the new trustee, complete their own anti-money-laundering review under the AMLA, identify the settlor, the beneficiaries and the controlling persons, and only then accept instructions.
Why it costs
The classic sequence of errors is this: the deed of appointment is signed, the old trustee believes it is released, and the new trustee cannot yet give instructions because the account has not been re-papered. For a period the assets are in a gap with nobody able to act. If a distribution, a tax payment or a market decision falls in that window, the consequences land on the beneficiaries. In a worse case the bank freezes the account while questions are open.
How to avoid it
Open the banking dialogue early, in parallel with the legal work, and ask for the bank's own list of documents. Agree the effective date of the appointment with the bank's onboarding timeline, not only with the lawyers' timeline. Keep the old trustee in office, with the existing mandate, until the new trustee can operate the account. The banking and custody page covers how custody rules vary by seat.
Mistake five: ignoring tax residence and reporting
A move can change which reporting regimes apply. Trusts may be treated as financial institutions or as passive entities under the automatic exchange of information (AEOI/CRS), and trust registers in other countries may have to be updated or closed.
Why it costs
An unfiled update to a register, or an inconsistent self-certification at the bank, can generate penalties and, more importantly, mismatches that trigger enquiries in the countries where beneficiaries live. Settlors who are US persons, or who are about to relocate themselves, face additional constraints that change the analysis.
How to avoid it
List every register and reporting obligation in the old and new seat, and decide who files what and when. Compare the regimes using trust registers and privacy and reporting regimes compared. If the settlor is a US person, read the US person settlor situation first. Tax outcomes depend on individual circumstances and need individual advice.
Mistake six: losing the records
Trusteeship is a continuity function. The new trustee must understand why past decisions were made, what the settlor wanted, which distributions were made and on what basis.
Why it costs
Without trust accounts, minutes, letters of wishes and correspondence, the new trustee cannot exercise its discretion in an informed way. It may also be unable to answer a regulator or a court. An old trustee that hands over a partial file can leave a gap in the audit trail that nobody can later close.
How to avoid it
Agree a handover schedule listing the accounts, deeds, minutes, valuations, registers, due-diligence files and letters of wishes. Ask for a written acknowledgement of what was delivered. For the legal weight of a letter of wishes, see letters of wishes across seats.
A short pre-move checklist
- Obtain a written review of the deed's powers, including protector and reserved powers
- Build a consent matrix: who must agree, in what form, and where the evidence is kept
- Confirm what changes: trustee only, seat, or governing law as well
- Open the bank dialogue early and obtain its document list
- Set the effective date of the appointment against the bank's onboarding timeline
- List registers and reporting filings in the old and new seat
- Agree a records handover schedule and get a written receipt
- Keep the outgoing trustee in office until the new one can operate the accounts
For a fuller list of risks to test, use the pre-relocation risk checklist. The relocating an existing trust page describes the service itself.
Frequently asked questions
Can any trust be moved to a Swiss trustee?
Not automatically. It depends on the deed, the governing law and whether the powers to change trustee exist. Some trusts can be moved by a simple deed of appointment; others need the consent of several parties or a court. A review of the deed is the first step.
Do we have to change the governing law when we change the trustee?
No. The governing law and the seat are separate decisions. Many families keep the original governing law and change only the trustee and the place of administration. Changing the governing law is a bigger step with its own rules and risks.
Why do banks take so long to accept a new trustee?
Because they have to run their own checks on the new trustee, the settlor, the beneficiaries and the controlling persons, and re-document the account. Starting this in parallel with the legal work is the most effective way to avoid a gap.
Who has to consent to a change of trustee?
It depends on the deed. Typically the outgoing and incoming trustees, and often the protector or the settlor. Sometimes beneficiaries or a court are involved, especially where minors or unborn beneficiaries are affected. The power review should produce this list before anything is signed.
Does moving a trust change the tax position of the beneficiaries?
It can. Reporting obligations, the classification of the trust under exchange-of-information rules and the way different countries view the trustee can all change. The answer depends on where each person lives, so it needs an individual analysis.
What happens to the old trustee's liability?
That depends on the deed, the release given and the law that governs it. A clean handover with accounts, a written release where appropriate, and a documented transfer of records helps both sides. Do not assume liability ends on signature.
Is it safer to wait until a problem appears?
Not usually. A move made in a hurry, for instance after a bank has given notice, leaves less room to review powers and collect consents. A periodic check of whether a trust still fits its seat, as described in reviewing whether a trust still fits its seat, makes a planned move easier.
Sources
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