How does a trust facilitate succession planning?

A trust allows you to define precisely how wealth is transferred (timing, conditions, allocation) while avoiding lengthy and costly probate proceedings. The trustee ensures continuity of management and distributes assets according to the trust terms and the settlor's expressed wishes.

Can a trust override forced heirship rules?

The recognition of trusts in the face of forced heirship rules varies by jurisdiction. In Switzerland, a trust established in good faith and in due time may be effective, but a case-by-case analysis is essential. We always work in coordination with solicitors specialising in succession law.

When should a succession trust be established?

Ideally as early as possible, while the settlor is in good health and no litigation is pending or foreseeable. A trust established late or under duress could be challenged. We recommend initiating the process as soon as the wealth structure becomes complex.

How does a trust interact with a will?

A trust and a will are complementary. The will can contain a pour-over clause directing certain assets into the trust upon death. The trust, in turn, manages and distributes assets already transferred, without going through testamentary succession.

Succession Planning Through Trusts — Swiss Trustee

The trust: the preferred tool for succession planning

Succession planning is one of the most common reasons for establishing a trust. Unlike a simple will, a trust allows you to organise the transfer of wealth in a progressive, conditional and controlled manner, while ensuring continuity of management beyond the founder's death.

For wealthy families, the stakes are manifold: preserving family unity, preventing conflicts among heirs, protecting vulnerable beneficiaries, optimising the tax burden of the transfer and safeguarding assets across multiple generations.

The limitations of a traditional will

A will, although indispensable, has several limitations in the context of complex international wealth:

Probate proceedings: in many jurisdictions, testamentary succession involves lengthy, costly and public court procedures. A trust avoids this step because the assets are already held by the trustee.
Conflicts of law: when wealth is spread across several countries, applicable succession rules may conflict. A trust, governed by the law of its jurisdiction, offers greater legal predictability.
Lack of flexibility: a will takes effect on death and does not allow for sophisticated conditions. A trust can provide for progressive distributions, age conditions, educational requirements or involvement in the family business.
Forced heirship: some legislations impose minimum shares on protected heirs. A trust, structured appropriately and in due time, may allow greater freedom of disposition.

Trust structures for succession

Several types of trusts may be used in the context of succession planning:

Discretionary trust: the trustee has broad discretion to decide the timing and amount of distributions. Ideal for protecting young or inexperienced beneficiaries.
Fixed-interest trust: beneficiaries' rights are predetermined (for example, income to the surviving spouse, capital to the children). Offers less flexibility but greater predictability.
Dynasty trust: designed to endure for multiple generations. Enables the creation of a lasting family estate with evolving governance rules.
Trust with letter of wishes: the settlor expresses their intentions in a non-binding document that the trustee takes into consideration. Allows wishes to be updated without amending the trust deed.

Intergenerational transfer: a critical challenge

Studies show that 70% of family wealth is lost by the second generation and 90% by the third. The primary causes are not financial but human: family conflicts, unprepared heirs, lack of clear governance.

A well-designed succession trust addresses these challenges by structuring not only the financial dimension of the transfer but also its human dimension. It can integrate mechanisms for beneficiary education, progressive access conditions and family governance bodies.

The advantage of a Swiss trustee for succession

As a FINMA-licensed trustee, Swiss Trustee provides the institutional stability essential for structures intended to last several decades. Our base in Geneva, at the heart of the Swiss financial ecosystem, allows us to work in close coordination with the family's banks, wealth managers and legal advisers.

We guide each family in designing a comprehensive succession solution, from the initial analysis of objectives through to the day-to-day administration of the trust, including the selection of the jurisdiction and the drafting of the trust deed with specialist lawyers.

Succession planning through trusts