Private Trust Company: How Your Family Could Benefit

23 June 2021

If your family has assets or businesses spread around the globe, then a Private Trust Company can help you control your assets and pass them on to the next generation.

Private Trust Companies give families more control than traditional trusts and are becoming more popular among high-net-worth families. They can help preserve your family’s wealth – protecting your assets while at the same time allowing younger family members to cut their business teeth.

What is a Private Trust Company?

A Private Trust Company acts as a trustee of a trust or group of trusts. It has a Board of Directors which can include family members and appointed professional advisors or business associates.

Unlike a traditional Trust, family members can come up with their own governance rules.

This means you and your family can make sure the roles and responsibilities of your family’s Private Trust Company are clearly defined.

A Private Trust Company gives family members direct involvement in management of the trusts and the assets, for example a Private Trust Company can act as a Trustee for a Master Trust which itself holds other Trusts, often called Feeder Trusts which can hold family offices and investments.

What are Private Trust Companies used for?

Private Trust Companies can be set up to manage your family’s tax liabilities. This makes them useful for both tax and succession planning.

In India, fears over the possible introduction of inheritance tax has encouraged more families to set up a Private Trust Company.

This, along with tax tribunal rulings in favour of Private Trust Companies, has led to an increase in Indian entrepreneurs using overseas trusts and companies to hold financial investments and business interests.

Singapore’s attractive tax regime, which includes exemptions for some family office structures, has made it a popular centre for setting up a Private Trust Company.

Do we need to set up a Private Trust Company?

If you have the resources, Private Trust Companies can help secure your family’s future. They can allow you to protect wealth built over decades but also help with allowing you to pass your businesses to younger relatives without worrying over potential liabilities.

Trusts have become an important planning tool to achieve objectives such as:

  • Succession planning
  • Protection from third party risks
  • Protection from third party liabilities
  • Asset management
  • Tax planning

Popular locations include the Isle of Man, Jersey, Cayman Islands, Bermuda, British Virgin Islands, Bahamas and some US states including Wyoming, New Hampshire and Nevada.

How can we help?

As a professional Trustee, ZEDRA handles the administration of Private Trust Companies and assists with their management if required.

We also provide administration services to the overlying purpose Trust or Foundation, and to the underlying companies incorporated to hold the trust assets.

For very wealthy families, Private Trust Companies allow today’s successors to understand the long term responsibility that comes with handling family wealth.

Contact Wendy Sim or Yong Sen Goh to find out more about how a Private Trust Company can help you manage your family’s cross-border assets.

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