Private Trust Companies: An Essential Estate Planning Tool for UHNW Families

Written by:
Justin Guilder
Devesh Aggarwal

Estate planning is a sophisticated endeavor for Ultra High Net Worth (UHNW) families, seeking to ensure the longevity and preservation of their wealth across generations.

An emerging trend among such affluent families is the establishment of Private Trust Companies to manage and streamline the administration of their trusts and estates.

Let’s dive into the world of Private Trust Companies, exploring their structure, benefits, and the considerations one must entertain when establishing one.

What is a Private Trust Company?

A Private Trust Company acts as a personalized hub for managing a family's wealth and fiduciary responsibilities.

  • Definition: A Private Trust Company is a specialized corporation or limited liability company created by a family. Unlike traditional trust companies or bank trust departments, a Private Trust Company is tailored exclusively to manage the trusts and estates of the founding family.
  • Core Functions: The Private Trust Company undertakes a plethora of administrative tasks ranging from managing trust investments, orchestrating distributions, ensuring tax compliance, and other fiduciary duties synonymous with preserving family     wealth.
  • Ownership and Operation: Owned and operated by the family, a Private Trust Company alleviates potential conflicts of interest that might arise with external corporate trustees, fostering a more controlled and aligned fiduciary management approach.

5 Key Benefits of a Private Trust Company

The allure of Private Trust Company lies in their ability to offer a bespoke, controlled, and private estate management solution. Here’s a snapshot of the myriad benefits they bring to the table:

  • Unwavering Control: With a Private Trust Company, the family holds the reins, dictating policies, procedures, and even the staffing, ensuring a harmonized alignment with the family’s long-term objectives and values.
  • Tailored Customization: From the structural blueprint of the Private Trust Company to the trust terms and investment strategies, everything can be customized to resonate with the family's unique needs and preferences.
  • Guarded Privacy: A Private Trust Company acts as a veil of privacy, keeping all trust-related information within the family’s domain, far from the prying eyes of external corporate trustees.
  • Cost Efficiency: Although establishing a Private Trust Company requires a substantial initial outlay, the long-term financial narrative is appealing. Private Trust Companies can offer economies of scale compared to the fragmented approach of employing multiple independent trustees and trust protectors.
  • Fostering Family Involvement: Private Trust Companies serve as a fertile ground for next-generation family members to grasp the reins of fiduciary oversight, nurturing financial literacy and grooming heirs for future stewardship of the family’s wealth.

How to establish a Private Trust Company?

The journey towards establishing a Private Trust Company requires a meticulous examination of legal, regulatory, and financial landscapes.

  • Jurisdictional Requirements: The regulatory ambiance varies across states. Regions like Alaska, Nevada, and South Dakota are often hailed for their Private Trust Company-friendly regulations.
  • Initial Capital and Operational Costs: The family must fuel the initial establishment of the Private Trust Company and ensure there's a robust asset base to cover the ongoing operational expenses. The entity should be well-capitalized and manned by     seasoned professionals.
  • Regulatory Oversight: Private Trust Companies come under the scrutiny of state banking authorities and are subject to rigorous licensing, audit requirements, and other regulatory mandates in most jurisdictions.
  • Outsourcing Aspects: Despite the in-house management, certain facets like investment management may still be outsourced to professional advisors, maintaining a blend of internal control and external expertise.

check out the video below to understand how UHNW families create generational legacies using such structures and more:



Private Trust Companies emerge as a compelling estate planning tool, encapsulating control, customization, and a consolidated approach towards fiduciary duties for multi-generational wealthy families.

However, the complex legal, regulatory, and financial intricacies involved mandate a well-informed, well-orchestrated approach towards establishment.

If you are interested in learning more read our comprehensive guide on Estate Planning.

Either way engaging with professionals seasoned in the realm of Private Trust Companies can provide invaluable insights, ensuring a smooth sail through the establishment process, aligning the Private Trust Company's operations with the family's vision, and setting a strong foundation for preserving and nurturing wealth across generations.

Take the first step and click here to talk to one of our advisors to help you on this journey.

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