Is it Time to Consider Forming a Private Trust Company?

Date: Jan 09 2019

Ruth Easterling, Managing Director, Member Services, Family Office Exchange

As family interests expand beyond the core operating business and foundational family office services, the family, executives, and entities involved typically experience growing complexity. This complexity may be experienced through:

  • Unclear decision channels
  • Being overwhelmed with administrative details, new projects, acquisitions and lack of process
  • Uncertainty about how a new initiative moves the family forward – or not
  • Expanding number of family households and beneficiaries
  • A general sense that it is time to take a step back and look at the bigger picture of the family’s direction

Private Trust Company Advantages

When an enterprise level family goes through this process of examining the “bigger picture”, or strategic planning, they often consider forming a Private Trust Company (PTC). This is because:

  • A PTC brings structure for centralizing the management and fiduciary oversight related to the family trusts and personal capital. 
  • The requirements of the structure elevate the decision making within the family as it creates (or builds upon existing) governance and supporting processes for decision making. Typically, families experience a “new level of professionalism” in the services that are supporting their interests.
  • The centralized fiduciary oversight, when used at a best practice level, brings focus to beneficiary development. Distribution processes revolve around balancing and connecting the intent of the trust with the interests and development of the beneficiary.
  • The structure can be used to minimize ownership risk, simplify complex trust structures, and bring tax benefits.

The PTC Structure may not be the solution for all families, and there are other options available. FOX is holding a PTC Fundamentals Workshop, February 20-21 that will review trust structure options and delve into the considerations when forming a PTC. For more information, please click here.

2019 FOX Private Trust Company Fundamentals Workshop - click to learn more