The Advantages of a Private Trust Company for Wealthy Families

A PTC is a legal entity established to serve as the trustee of one or more family trusts, providing a customised and flexible approach to managing family wealth and ensuring that fiduciary responsibilities are met.

We’ve broken down some of the key reasons why a PTC can be more advantageous for a wealthy family in comparison to a regular discretionary irrevocable trust.

Enhanced control and flexibility

One of the primary benefits of a PTC is the enhanced control it provides to the family over the trust administration. In a traditional discretionary irrevocable trust, the trustee holds significant power over the management and distribution of the trust assets.

This can sometimes lead to conflicts or dissatisfaction if the trustee’s decisions do not align with the family’s expectations or values. With a PTC, family members can serve on the board of directors or appoint trusted advisers to the board, ensuring that the decision-making process remains aligned with the family’s interests and values.

Tailored governance structure

A PTC allows for a tailored governance structure that can be designed to meet the specific needs and dynamics of the family. This can include setting up committees to handle investment decisions, distributions, and other fiduciary responsibilities.

The governance structure can also incorporate mechanisms for resolving disputes and making decisions in a collaborative manner. This level of customisation is often not possible with a traditional trust, which typically follows a more rigid structure dictated by the trust deed and relevant laws.

Confidentiality and privacy

Privacy is a significant concern for many wealthy families, and a PTC can offer a higher level of confidentiality compared to a traditional trust.

In many jurisdictions, the establishment and operation of a PTC do not require public disclosure of the identities of the family members or the assets under management. This can be particularly important for families who value discretion and wish to keep their financial affairs private.

Succession planning and continuity

A PTC can provide greater continuity in the management of family assets across generations. With a PTC, the family can establish a long-term governance plan that ensures continuity and stability in trust administration. This can include preparing the next generation to take on leadership roles within the PTC, ensuring that the family’s values and objectives are maintained over time.

Enhanced professional management

A PTC can leverage the expertise of professional advisers, such as legal, tax, and investment experts, by including them on the board or in advisery roles. This allows the family to benefit from high-level professional management while still maintaining oversight and control.

In contrast, a traditional trust may rely on the expertise of a single trustee or corporate trustee, which might not offer the same level of personalised attention and specialised knowledge.

Choosing the right jurisdiction for your family

Multiple jurisdictions offer advantages for PTC structures. Switzerland, Liechtenstein, and the Cayman Islands for example each offer distinct advantages for establishing and managing PTCs.

Switzerland is known for its stability, confidentiality, and professional expertise. Liechtenstein offers modern, flexible trust laws and significant tax advantages. The Cayman Islands provide tax neutrality, efficient regulatory processes, and strong confidentiality protections.

Choosing the right jurisdiction depends on the specific needs and priorities of the family, including considerations such as the legal structure, tax implications, and the desired level of confidentiality and control.

How ZEDRA can help

ZEDRA can support you to identify the right trust structure and jurisdiction to meet your unique needs. As a professional trustee, we can assist with the ongoing administration of PTCs, and management if required.

For more information on how ZEDRA can help you structure a PTC, contact Vadim Neumann.