What is a Private Family Trust Company?
A private family trust company (“PFTC”) is in simple terms a trust company formed by a single family solely for the purpose of acting as a “corporate” trustee for any or all trusts established by the family. Since it’s a legal corporate entity formed under state laws, there are specific filings, requirements, and structures that must be conformed to in order to qualify and maintain the PFTC. Most families who have one or more trusts as part of their estate plan may find the formation costs and regular maintenance too high and administratively burdensome to be deemed necessary; nevertheless, for families with substantial multi-generational wealth the benefits a PFTC can provide is worthy of consideration.
First, not all 50 states have laws enabling the formation of a PFTC. PFTC laws are not uniform and each jurisdiction has its own specific and unique set of statutes governing these entities; therefore, it is imperative that you work with a qualified attorney to compare the various jurisdictions to gain a complete understanding of the legal differences before making your final determination. Briefly, important factors for initial consideration are:
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