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"Considerations When Forming a Private Family Trust Company in the United States" Richard Johnson in Family Office Magazine 

by Richard Johnson

Published: July, 2018

Submission: August, 2018

 



Ultra-high-net-worth families have sophisticated trust and financial needs that create many challenges. These challenges include implementing a workable, longterm governance and succession plan and maintaining flexibility for ever-evolving goals and circumstances. Using progressive trust laws in the United States, families from all over the world are addressing these challenges (and many others) by establishing a private family trust company (PFTC). Key considerations follow. Definition



In the U.S. a PFTC is a state-chartered entity which serves as a fiduciary of trusts benefitting a defined group of family members, including as a trustee of the family’s trusts. It is prohibited from providing fiduciary services to the general public.



General Considerations Long-term governance and succession is a common problem UHNW families face. Families with existing trust relationships and trustees often deal with corporate and personnel changes that undermine confidence and erode long-standing relationships between the family (as a grantor or beneficiary) and the fiduciary. A PFTC can eliminate these issues as it serves the needs of a single family, allowing the family greater influence on hiring decisions.



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