Benefits of a Private Trust Company

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As a state-chartered legal entity, a private trust company (PTC) provides fiduciary services for family members. Establishing a PTC represents an effective strategy for families of high net worth to deal with the challenges presented by the generational transferring of wealth. However, creating a PTC comes with unique considerations that include analyzing its effectiveness as a family’s life moves forward.

A PTC acts as the trustee for just one family. Family members frequently are actively involved in managing a PTC. Families that form PTCs typically are worth more than $200 million, with assets placed in the trust possessing a value of at least $100 million.

What Are the Benefits of a Private Trust Company?

Because of low legal fees and no capital requirements, family law attorneys typically establish PTCs in one of four states.

  • Wyoming
  • Florida
  • Nevada
  • South Dakota

Why should you establish a PTC instead of a trust in your home state?

Friendlier Statutes

The four states listed above offer much more trust-friendly laws for families looking to start a PTC. If you live in an unfriendly trust state such as California, establishing a PTC in Wyoming means your trust follows Wyoming’s much friendlier trust statutes. This means you enjoy an almost perpetual trust duration, as well as no state income tax and strong protection against lawsuits and creditors.

Enhanced Privacy

Because creating a PTC is a private process, you do not have to use your family’s name to designate the trust. Privacy can be difficult to achieve with a corporate trustee because your family’s name might appear in one or more legal documents accessible by the public. Privacy is why many international families start a PTC in the United States. Unlike other developed countries, the United States does not require common reporting standards that ensure the automatic exchange of information.

More Control

You and your family gain more control over a PTC than you would with other types of trusts. The lack of a corporate trustee means only your family decides how to allocate assets through generational transfers of wealth. You choose the individuals who serve in different governance roles, such as appointers, board of managers, and trust company officers.

Greater Flexibility

Although every governance provision influences the operation of a PTC, you can still create different requirements for individual trusts. You can name each of your children to be the head of the investment committee that manages money for his or her trust. As your family’s financial needs change, you can modify the structure of your PTC to accommodate the change.

Lower Costs

You can expect to cover a few one-time-only set-up costs, but the long-term costs of administering a PTC are substantially lower than the cost of administering other types of trusts. In Wyoming, capital requirements are the lowest of any state in the nation. You are not required by law to run a staffed office or have full-time employees on your payroll. All you have to do in Wyoming is to hire a service firm to handle all administrative functions.

Get Help Setting Up a PTC

Before you decide to form a Private Trust Company, discuss your plans with one of our family law attorneys. We can help you set up your PTC in a friendly state like Wyoming and guide you through creating this type of trust. Cloud Peak Law Group helps families with considerable financial assets protect those assets from creditors and lawsuit settlements.

Contact us today to schedule a free case evaluation. We will analyze your financial position to determine how to set up a Private Trust Company for yourself and your family.



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