Blended Family Trust Cross-Border: When Children Live in Different Countries

A blended family trust cross border is rarely a simple drafting exercise. One parent has children from an earlier relationship, a second spouse has others, and the children have grown up, studied or settled in different countries. Each of those countries may have its own forced heirship rules, and none of them was written with your family in mind. This page explains where those rules collide, what a trust can realistically do about it, and which questions deserve an individual analysis.

A typical picture

Example: a widower living in Lausanne remarries. He has a daughter who lives in a civil-law country and a son who settled in a US state, and his new wife brings a stepdaughter who lives in a third country. He wants his wife housed and supported for life, his two children treated fairly, and the stepdaughter included in a measured way. He also holds a family company, a portfolio and a holiday property abroad.

Nothing about this wish list is unusual. The difficulty is that the law governing his estate, the law governing any trust, and the law of each child's home country can give three different answers to the question "who is entitled to what?".

Why forced heirship is the real issue

Forced heirship (a reserved portion that the owner cannot freely give away) is not a single rule. It differs by country, and sometimes by the kind of asset. In a blended family it bites harder, because the people the law protects are often the very people the owner would rather provide for in different ways: a second spouse needs income, a child from the first marriage expects capital.

Three situations tend to cause trouble:

• A child's home country gives reserved heirs a claim against assets that left the estate during life, including assets placed in a trust.
• A second spouse is protected in one country but not in another, so the surviving partner may be over- or under-provided depending on which court decides.
• Real estate and certain local assets follow the rules of the place where they sit, whatever the rest of the estate does. The situs of trust assets matters here.

A trust does not make these claims disappear. It changes who holds the assets and under which law, which affects where a claim is brought and how well it can succeed. That is a different thing from removing the claim.

The Swiss reserve after the reform

Switzerland revised its succession law, and the new rules took effect on January 1, 2023. The Federal Office of Justice presents the reform as giving owners freedom to dispose of a larger share of their assets. Under Article 471 of the Civil Code, the reserve is half of the statutory entitlement. Under Article 470, paragraph 1, the reserve protects descendants, a spouse or a registered partner; parents are no longer reserved heirs.

For a blended family this has two effects. First, a Swiss-governed estate leaves more room to favor a second spouse or a particular child. Second, stepchildren are not reserved heirs under Swiss law, so a stepdaughter receives something only if the owner provides for her.

The amended federal private international law act on international successions took effect on January 1, 2025. Whether Swiss succession law applies to your estate at all depends on your residence and nationality, and on the rules of the other countries involved. A family with children abroad should treat the Swiss figures as one input, not as the answer. For the wider picture on this topic, see forced heirship and trusts.

What the Hague Trusts Convention does here

Switzerland signed the Hague Convention on the Law Applicable to Trusts and on their Recognition on April 3, 2007, ratified it on April 26, 2007, and it entered into force for Switzerland on July 1, 2007. Trusts are dealt with in Article 149c of the federal private international law act, which refers to the Convention for the applicable law.

Two mechanisms matter for a blended family:

1. Choice of law. Under Articles 6 and 7 of the Convention, the trust is governed by the law the settlor chose, expressly or by implication. Without a choice, the law with the closest connection applies, looking at the place of administration, the location of the 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 Article 7 applies.
2. The limit. Article 15 keeps mandatory rules on succession rights in place. So the Convention recognizes the trust, but it does not switch off the heirship protections of a state whose courts have jurisdiction.

In short: recognition of the trust is one question, and the reach of a child's reserved claim is another. Our guide to the Hague Trusts Convention and the page on governing law versus seat set out the difference in more detail.

Heirship regime per child: a decision map

The easiest way to organize the problem is child by child. The diagram below is a simplified route through the questions, not a legal opinion.

Run the map once for each child and for the second spouse. The result is often a different answer for each of them, which is exactly why one family may need more than one instrument.

How the main regimes differ

The table is a generalization. Each country has exceptions, and the details change. The page on common-law versus civil-law seats compares the legal systems more closely.

What a trust can bring to a blended family

A trust can do several useful things when the family is spread across countries:

• Separate use from ownership. A second spouse can be given a right to live in a property or receive income, while the capital is reserved for children. This answers the classic blended-family tension.
• Treat children differently on purpose. A discretionary arrangement lets a trustee respond to need, for example a child abroad who is vulnerable or who has a different tax position. See blended-family trust seat factors.
• Hold assets in one place. Instead of five estates in five countries, one structure can concentrate administration, which reduces the number of courts and procedures.
• Record intentions. A letter of wishes helps the trustee understand how the settlor sees each branch of the family, although its legal weight varies by seat.

What a trust cannot do

A candid view matters more than a hopeful one. A trust cannot override mandatory heirship rules that a competent court decides to apply. It cannot bind a child who is not a party and whose home courts claim jurisdiction. It cannot remove tax duties arising in a child's country. If a US citizen is among the beneficiaries or the settlor, FATCA reporting applies; Switzerland currently operates the regime under its agreement of February 14, 2013, with aggregated communications and group requests. Reporting is a separate subject from heirship, but it often arrives at the same time.

A trust also adds cost and administration, and it adds a long-term relationship with a trustee. For a modest estate with few cross-border links, a will or an inheritance agreement may do the job with less machinery.

Alternatives and complements

• Will and inheritance agreement. Under Swiss law, an agreement with heirs can settle expectations while the owner is alive. A child abroad may have to give a waiver that is recognized in their own country, which requires local advice.
• Marriage contract. It can shape what the second spouse receives before the estate is even calculated.
• Foundation or company. Some families prefer a vehicle with legal personality; see trusts and foundations combined and trust, foundation or company.
• Separate structures per branch. One trust for children of the first marriage and another arrangement for the second spouse can reduce disputes.

Points to check before deciding

• List every child and the second spouse with country of residence, nationality and any dual status
• Identify which succession law each country would apply to the estate
• Check whether each country allows reserved heirs to challenge lifetime transfers
• Locate real estate and other assets with local rules, and note their situs
• Decide who is meant to receive income and who receives capital
• Choose the governing law and the seat on purpose, not by default
• Ask whether a waiver or agreement from each child is possible and recognized locally
• Consider reporting duties, including for any US person

A structured process helps: the questions to ask your counsel on the seat provide a starting list.