Navigating trustee transition: A step-by-step guide to finding a new trustee for your family office

14 May 2025 - Trustees play a crucial role in family wealth planning. Their functions typically include managing and safeguarding family office assets, funds allocation and distribution, tax compliance and proper governance, all of which means the abrupt resignation of a trustee can have far-reaching implications.

Whilst not uncommon, trustee resignations can occur almost without warning. Retirement, conflicts of interest, changes in focus or strategy, updated risk appetite, or jurisdictional pressure can all spark such an unexpected event. Irrespective of the cause, the outcome will be similar; families that plan on continuing with their trust structure will need to overcome the shock of losing their trustee and find a replacement.

Selecting a new trustee that understands your values and your short and long-term objectives can seem daunting, but there are steps you can take to make the transition much smoother.

Phase 1: The unexpected happens

Stay calm and evaluate the roadmap ahead. Your trust deed/agreement will contain clauses related to resignation, notice, continuation, appointment powers and more to guide you through the next steps.

Phase 2: Evaluate options

When starting the search for a new long-term partner, it is important to evaluate not only the external compliance factors, but also the long-standing knowledge, performance, and expertise available to you in the market. Such a profile, coupled with flexibility in case your needs change, will help you map your choices.

Phase 3: Manage expectations

Once you have found the right firm to act as your new trustee, it is time to review the requirements of the overall arrangement. Your KYC documents will be needed for an effective onboarding, so ensuring proper preparation of your compliance credentials will make the process smoother.

The new trustee will assess your scheme’s complexity, verify the authority of those in charge, and its validity, and potentially challenge the status quo of the current scheme since many structures are set up at a specific point in time, and goals and objectives can change. This is an opportune time to understand if adjustments in plans, jurisdictions, limitations, additions of protectors, or other changes, need to be made.

Depending on the nature of the trust, conversations with beneficiaries might also become relevant. Some might still be minors, others may have updated tax residencies, employment, or other circumstances. The new trustee will want to understand and have access to the most up-to-date information for all beneficiaries.

There will also be a need to review what has been done by your previous trustee when it comes to collaborating on pending obligations, and what steps were taken to limit any liabilities going forward.

Phase 4: Peace of mind

Once everyone is comfortable, the new appointment will need to be formalized, and the records will be updated to reflect the arrangement put in place. It can be helpful for families to work out a full transition plan and proceed step-by-step, asking any questions they might have to ensure clarity, transparency, and objectives, as well as identifying others within the close circles that should be contacted to reflect any updates.

Conclusion

Losing your family’s trustee can be a daunting experience, but it is one that you can certainly overcome. The key is to take swift action while using this circumstance as an opportunity to review your initial goals, determine if they remain relevant and current, and then work with an established, experienced business partner or organization to implement your updated plan.

The Citco group of companies (Citco) is a family-built, people-driven business. We offer a range of customizable solutions to support individuals and their families globally, ensuring our clients can meet their short- and long-term objectives.

Our dedicated team of private wealth practitioners provides a hands-on personalized service and works as an extension of your team of trusted advisors to implement and manage bespoke structures such as trusts, which align with your estate planning, wealth preservation, and investment strategies.