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Private Trust Companies


A private trust company, also known as a family trust company or an exempt trust company, is an entity formed under state law to provide trust and fiduciary services to a single family, and it is prohibited from providing services to the general public. Typically, a private trust company must be chartered or licensed by the state where it is located, and as a result, it is subject to state regulation. A handful of states permit unregulated or unlicensed private trust companies. An unregulated or unlicensed private trust company does not have a state charter or license, capital requirements, or state regulatory oversight.

The following are some of the key benefits of a private trust company:
  • The Investment Committee of a private trust company creates a forum for current and future generations to have an active voice in the investment management of assets in irrevocable family trusts.

  • A private trust company can be located in a state that has favorable trust and tax laws.

  • A private trust company adds stability as trustee of family trusts because it will be in existence for as long as a family needs it, and its personnel can be tailored to the specific needs of a family.

  • A private trust company, unlike other trustees, is more in tune with the special relationship that families have with heavily concentrated assets such as real estate and family businesses.

  • A private trust company is generally subject to less regulation than a trust company that serves the general public.

  • A private trust company provides an opportunity for a family to develop its human and intellectual capital.

  • A private trust company that is chartered or licensed under state law can provide investment advice to family trusts without subjecting itself to SEC regulation.