Does A Private Trust Company Need To Register

Date: Jan 09 2018

What is a Private Family unit Trust Company?

A private family unit trust company (PFTC) is a country-chartered entity designed to provide fiduciary services to members of a family unit. PFTC is singled-out from a "family office" in that information technology can serve as a fiduciary under country law.

Private family unit trust companies can take on many responsibilities commonly performed by the family unit office, including investment and financial direction, accounting, and recordkeeping. They tin can too operate separately from the family office, while notwithstanding relying on it for administrative and dorsum role back up through a service contract.

Private Family Trust Company Advantages

Every family has its ain reasons for establishing a PFTC, just some of the primary advantages include:

A permanent trustee that can adapt to changing family dynamics over time, equally opposed to an individual trustee, which oftentimes presents succession concerns.
Consistency and continuity of a trustee that is knowledgeable nigh the family. Since the PFTC serves as trustee and the board of directors includes several trusted advisors with, ideally, differing ages/tenures, it preserves an advantageous "institutional retentiveness."
Enhanced flexibility and control over decision making. Families can choose lath members, typhoon policies and procedures, structure the organization to suit their needs, obtain voting power for important decisions, and arrange the distribution process to their liking.
The power to contribute to the investment and nugget management process through participation on the investment committee of the PFTC. In add-on, families can be more involved in the drafting of the investment and nugget management policies and procedures. This level of involvement is different that of a traditional trustee.
Acting through directors/officers and errors/omissions insurance provides increased liability protection for determination makers. In improver, in regulated states, it is more hard to pierce the corporate veil.
Better decision-making with respect to closely held and family owned assets by involving multiple trusted advisors, including lawyers, accountants, investment managers, and others who are intimately familiar with family assets.
Greater control over trustee fees and costs through ownership, involvement, and determination making in the PFTC.
Enhanced privacy. The family has more command over the PFTC and the disbursement of information. A large institution is not involved in the twenty-four hours-to-day administration, and there are fewer people privy to family issues and concerns. In addition, some states have laws that reverberate this privacy concern. South Dakota, for case, has a total seal forever upon filing of all trust documents.
Ability to integrate the next generation in administration of the family enterprise through involvement in lath meetings, committees, and decision making. This level of involvement is different that of a traditional trustee situation where family unit involvement can be somewhat express.

Families that apply a family part structure are well-equipped to transition to a PFTC structure. The families tin can choose their long-time trusted advisors to run the private family trust company, all while concurrently integrating the next generation into the family'due south wealth planning and management.

Nigh Matt Tobin

Matthew Tobin is the Managing Director of the South Dakota Trust Company, LLC. His primary responsibilities include legislation direction, special projects administration, new client/business evolution, general role administration, and development and direction of the Private Family Trust Company business.

Almost Tom Cota

Tom Cota is a Staff Associate with South Dakota Trust Company, LLC (SDTC) in Sioux Falls, South Dakota. His primary responsibilities include assisting with legal and regulatory compliance for SDTC's individual/public trust company clients, profitable with administrative work, and working on a variety of special projects.