A Private Trust Company (“PTC”) is a corporate entity whose sole purpose is to act as trustee in relation to one, or a series, of trusts. As long as certain criteria are fulfilled the PTC will not have to obtain a licence to carry out trust company business. The use of PTC’s by wealthy families has increased in popularity over the last few years.
PTCs are commonly used by high net worth (HNW) families in their wealth structuring, for a number of reasons. They protect confidentiality, they provide a comprehensive framework under which family members can be involved in decision making (by being on the board of the PTC) and they can avoid the complications of succession .
For most, a trust is a very complicated structure to understand, but it can be an excellent wealth planning tool, especially for wealthy, international families. Trusts are used by numerous wealthy and well-known families around the world, and are often suggested by their family offices, as a way of separating ownership to some or all of their assets.
A trust can best be described as a legal arrangement (a legal form) through which the legal ownership of assets is transferred to the trustee in order to keep these assets for the benefit of others (the beneficiaries); the equitable ownership of the assets is thus deemed to be held by the beneficiaries. Trusts are established based on the trust law of common-law countries and date back to the time of the Crusades. Although trusts are a common-law structure, the trust and trustee(s) can be based in Switzerland.
The Private Trust Company itself can be owned by a non-charitable purpose trust or indeed a private foundation established in St. Lucia, Jersey, Liechtenstein or some other jurisdiction.
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