Asset protection through trusts

Why protect your wealth with a trust?

In a global environment marked by geopolitical instability, regulatory inflation and an increase in litigation, asset protection has become a central concern for wealthy families. The trust, an Anglo-Saxon legal mechanism recognised in over 150 jurisdictions, is one of the most effective tools for securing assets over the long term.

By transferring assets to a professional trustee, the original owner (settlor) creates a legal separation between their personal estate and the trust assets. This separation is the key to protection: trust assets no longer form part of the settlor's estate and therefore cannot be seized by personal creditors.

The risks a trust protects against

A properly structured trust provides protection against a wide range of risks to which wealthy families are exposed:

• Legal and litigation risks: commercial disputes, creditor claims, contentious divorces, civil or criminal proceedings. Assets in an irrevocable trust are legally distinct from the settlor's personal estate.
• Political instability: nationalisations, confiscations, regime changes. A trust administered in Switzerland places assets in one of the world's most stable jurisdictions.
• Forced heirship rules: in certain jurisdictions, compulsory succession rules may limit the freedom to dispose of assets. A trust allows the settlor to organise the transfer of wealth according to their wishes.
• Economic risks: hyperinflation, banking instability, currency crises. Diversifying assets within a trust with a Swiss trustee provides an additional layer of security.

The advantage of a FINMA-licensed Swiss trustee

Switzerland holds a unique position in the trust landscape. Although it does not yet have its own trust legislation, it has recognised foreign trusts since ratifying the Hague Convention in 2007. Moreover, since the Financial Institutions Act (FinIA) came into force in 2020, professional trustees in Switzerland are subject to FINMA supervision.

Choosing a FINMA-licensed trustee offers several decisive advantages for asset protection:

• Legal and political stability: Switzerland is renowned for its neutrality, rule of law and the robustness of its judicial system.
• Regulatory supervision: FINMA imposes high standards in governance, risk management and anti-money laundering.
• Professional secrecy: Swiss trustees are bound by strict confidentiality obligations, reinforcing beneficiary privacy.
• Financial infrastructure: access to top-tier Swiss banks enables optimal management of trust assets.

Common protection structures

Depending on the nature of the assets, the risk profile and the settlor's objectives, different structures may be considered:

• Irrevocable discretionary trust: offers the highest level of protection. The trustee has full discretion over distributions, strengthening the separation from the settlor.
• Trust with protector: an independent protector oversees trustee decisions, adding a governance layer without compromising protection.
• Private Trust Company (PTC): for substantial estates, a PTC allows the family to participate in governance while maintaining the structural protection of the trust.

Our approach

At Swiss Trustee, we design each protection structure in close collaboration with the client's legal and tax advisers. Our process includes a thorough analysis of specific risks, selection of the most appropriate trust jurisdiction (Jersey, Guernsey, New Zealand, etc.), drafting of the trust deed and establishment of governance. As a FINMA-licensed trustee, we then provide ongoing administration of the trust in compliance with the most demanding Swiss standards.