Introducing Private Trust Companies
Private Trust Companies are created to be the platform from where a family is governed; they are the forum where a family makes decisions regarding its business or investments and from where the family manages itself.
The Private Trust Company:
- is the owner of the family’s assets and is responsible for managing the personalities in the business and family
- ensuring that the family makes decisions in accordance with its constitution
- acts as the central point for all advice and guidance that the family may need
- manages the business and investments
A Private Trust Company is a Trustee that is created for the sole use of the family and can be established in any jurisdiction that is convenient for the family provided it is tax efficient and the laws of the country enable the Trustees to function, such as the Isle of Man or New Zealand.
The family will usually have a series of Trusts which hold the family’s business and investments. The Private Trust Company will act as Trustee as well as managing any other underlying companies.
Benefits of a Private Trust Company:
- The governance of the family is seated in a single entity ensuring that the overall aims and goals of the family are easily monitored
- The governance of the family is easy to maintain as the board of directors takes responsibility for its implementation and maintenance
- The family has direct control over its own affairs and can therefore ensure a greater sense of privacy
- The underlying structures are managed to the standards set by the family
- The family and individual members have more control over the costs incurred in running the affairs of the family
- Reporting is easier and with a higher degree of integrity
The ambition of many successful wealth creators is that their wealth will sustain future generations of their family and give something back to the community, however families are facing more and more barriers in protecting this legacy. It is main responsibility of the wealth creator to implement structures which protect the wealth as well as the wealth future generations create.
The Private Trust Company is a safe home for the family’s legacy. It is the starting block of family governance ensuring the right foundation is in place for future generations to build on, capitalising on the legacy. The wealth creator can rest assured that their hard work is taken care of because the right structure is in place.
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