Private Trust Companies (PTCs) are companies incorporated to act as trustee of a trust or a number of related trusts, for example with the same settlor or related settlors. They are not able to provide trust services to or solicit business from the general public.
PTCs are very popular among HNW/UHNW clients who desire a level of influence over, or at least a greater involvement in, the administration of the trusts under the control of the PTC, such as, for example (and subject to tax considerations) by appointing family members or trusted family advisers to the board of directors of the PTC.
PTCs are therefore a good place to start when considering establishing a family office or a complex wealth management structure for the administration of a family’s various interests and have proven especially popular where a patriarch wants a continued involvement in the direction of the family business.
The PTC acts as trustee of the family trust(s)/connected trusts and generally instructs a Cayman service provider such as IMS to provide some or all of the directors to the PTC and/or provide secretarial services and prepare accounts etc.
The most common ownership structure for a PTC is for the shares of the PTC to be held on a purpose trust, known in Cayman as a STAR Trust (see our Purpose Trusts page for more information), which would itself have a professional trustee and be administered by an offshore trust administrator such as IMS. Other ownership options are available but may be less attractive from a tax perspective.
Star Trusts must have an Enforcer (selected by the client), and will generally include provisions providing for certain controls and/or powers to be exercised by the Enforcer in respect of the STAR Trust, which would often include the power to appoint and remove trustees.
Often, where tax considerations might prevent family members from sitting on the board of the PTC, they may be able to act as protector or as part of a protector committee, allowing them to be involved in the family’s affairs at some level.
To find out more about PTCs, and how IMS can assist you, please email us at email@example.com.
PO Box 61
Harbour Centre, Grand Cayman
KY1-1102, Cayman Islands
T: +1 (345) 949 4244
F: +1 (345) 949 8635
IMS attends a number of relevant industry events in various jurisdictions, from private banking and family office forums, to hedge fund and captive insurance conferences. To find out where you can next meet us, please click here.