Moving trustees: it’s not as difficult as you may think

Changing trustee is a tried and tested legal process. Yet, surprisingly, many families who are unhappy with their trustee rarely put it to the test. They assume any attempt at a move will be slow, expensive and disruptive, so they stay put. Another year’s fees are paid and nothing changes.

Why so many families stay put

Many of the structures we review were set up fifteen or twenty years ago and are no longer fit for purpose. The Settlor initially chose a small, owner-managed trust company because they knew the people and could easily contact the partner or director looking after the relationship.

However, that trust company may well have been sold or merged since, perhaps more than once. In particular, private equity has spent the past decade buying trust businesses in the Channel Islands and beyond, creating ever larger and more cumbersome businesses. Integration often takes up a significant amount of management time and increases costs. In March 2025, the GFSC told the industry that firms often underestimate the time and effort needed to integrate acquisitions.

Corporate finance adviser, Clearwater, counted more than 40 consolidators in 2025, most of them backed by private equity. This year one of the largest listed fiduciary groups was taken private in a deal valued at about £2.7bn. The result of all this is simple: the trustee named on the letterhead may no longer feel like the trustee the family chose.

As one Channel Islands managing director told WealthBriefing in 2022, clients “have not necessarily had a relationship with a firm but with a person”. When that person leaves, the relationship often goes with them.

Buyers do appreciate this problem. Lincoln International, which advises on deals in the sector, describes the investment case as being “underpinned by stable, long-term client relationships with minimal attrition rates”. In other words, the price paid assumes that the clients will stay. But is this assumption indicative of a certain complacency?

What the law requires of the outgoing trustee

Unhappy with their trust relationship, beneficiaries can still be reluctant to seek a change. That reluctance is understandable. But it should not be confused with actual legal difficulty.

First and foremost, the Trust Deed will most probably contain a mechanism for replacing a trustee who no longer meets the family’s needs. Trust law also supports a family that wants to move. The cases make clear that the best interests of the beneficiaries are always paramount. In Guernsey, an outgoing trustee must “do everything necessary to vest the trust property” in its successor. Jersey’s law requires a departing trustee to surrender the trust property and sign the documents needed to transfer it.

The outgoing trustee is entitled to fair protection in return. It can ask for reasonable security against liabilities incurred while in office, including future and contingent liability, usually by way of an indemnity in the deed of retirement and appointment. STEP publishes a template deed that most advisers use as a starting point. Once the outgoing trustee has handed over, it is released from future liability to the beneficiaries, with limited exceptions.

The terms of the indemnity are where most of the negotiation happens, and it shouldn’t be open-ended. Whether it should benefit the outgoing firm’s successors after a merger or takeover is a fair question to ask in a consolidating market. The law also won’t allow it to cover fraud, wilful misconduct or gross negligence.

The trust deed normally says who can make the change, and offshore deeds commonly give the power to a protector. Where the deed is silent, the statutory powers fill the gap. It matters who holds the power. Beneficiaries, or any group of beneficiaries, cannot simply demand a new trustee, and the Court will not replace a trustee just because relations have become strained. The test is the welfare of the beneficiaries and the proper running of the trust.

Court applications are the exception, and the reported cases tend to involve unusual facts. In one Guernsey case in 2018 the trustee’s directors had all resigned, and the deeds gave no other solution to replace the trustee.

The courts expect both sides to act properly. In 2018, the Jersey court set aside a removal designed to avoid giving the outgoing trustee the indemnity it had been promised. On the other hand, a trustee that unreasonably clings to office risks an adverse costs order.

Guernsey is also updating its Trust law. In May 2026 the States approved reforms that, when they come into force, will reduce the default minimum number of trustees to one, remove a trustee automatically if they lose capacity, and set out more clearly how trust property passes to a new trustee after a death or removal. The proposals would also cap an indemnity over trust property at what the outgoing trustee could have claimed had it stayed in office. No commencement date has yet been set.

What it costs to change trustee

Changing trustee for proper reasons should not carry a penalty. Guernsey’s Fiduciary Rules require a trust company’s terms of business to set out its fees, “including exit fees”, and to charge them “in a fair and transparent manner”. Reading your terms of business is a sensible first step. If no exit fee is disclosed and agreed, you shouldn’t expect to pay one.

Handover work is usually charged on a time-spent basis, which is reasonable. One large provider’s published fee terms say exactly that, adding that it “will not charge a fixed termination fee” unless agreed otherwise. The cost depends on the state of the trust records. A well-kept structure with good governance is more straightforward to transfer than an older one whose records contain gaps and inconsistencies.

Retentions tend to cause the most concern. Can the outgoing trustee hold back part of the fund? Only in limited circumstances. Retention may be possible for a known, quantifiable upcoming liability such as a tax bill, but “extremely difficult” where liabilities are unknown or contingent. Any amount retained should be “no more than is necessary to meet the liability”.

Nor is a fee dispute a reason for delay. Where the parties can’t agree, a limited sum can sit in escrow while it’s resolved.

How a move works in practice

The steps are familiar to any experienced trustee.

1.     Read the deed: who holds the power, whose consent is needed, and whether there is a minimum required number of trustees. Follow its procedure exactly. Some deeds need the protector to appoint a successor before the old trustee can retire, and a misstep can invalidate the appointment.

2.     Choose or agree the new trustee and let it complete its due diligence.

3.     Agree the deed of retirement and appointment, including the indemnity.

4.     Transfer the assets efficiently. Bank accounts, portfolios, shares in underlying companies and any property all need to move. Directorships and registered offices of underlying companies are best changed at the same time.

5.     Hand over the records and notify the family’s advisers.

Guernsey law doesn’t vest trust assets in the new trustee automatically, so each one must be transferred, and banks and custodians set the pace. It pays to speak to them early. The start of a financial year, once the accounts are done, is often the best point to switch.

The records follow the trust. In principle the new trustee is entitled to “all records, books and other papers belonging to the trust”, and the outgoing trustee is expected to cooperate “fully and actively”. Electronic copies usually do, and the outgoing trustee can recover its reasonable costs of providing them. For a large or long-running trust, e-discovery tools can cut both the time and the bill.

When to ask the question

None of this means a family should move. A trustee who knows the family and communicates well, meeting and taking calls can be worth keeping.

But if you can’t name the person who looks after your trust, or if fees have risen while service levels haven’t, the question deserves an answer. Start with the trust deed and the terms of business, then speak to a new trustee you’d consider. In our experience, the move is usually simpler than families expect.

If a second opinion on your deed or terms of business would help, we’d be glad to take a look.