Wyoming Private Trust Companies
As an alternative to traditional individual or corporate trustees, Wyoming law permits families and their advisors to own and operate private trust companies (a “Private Trust Company” or “PTC”) to serve their family. For families with multiple trusts, large and complex assets, or a desire for additional input into fiduciary decision-making, a PTC may be an effective solution.
A PTC may be organized as a corporation or limited liability company. PTC activities are overseen by a Board of Directors or Managers comprised of family members and trusted advisors. Investment and distribution powers are typically held by committees populated with family members and trusted advisors. The PTC structure is flexible and the PTC Board and committees may be tailored to suit the individual needs of each family.
PTCs may elect to be supervised and regulated by the Wyoming Division of Banking (Wyoming Chartered Family Trust Company). Other PTCs prefer not to be supervised or regulated (Wyoming Private Single Family Trust Company) and reserve fiduciary oversight exclusively to the Board. Many families prefer the administrative simplicity of the unregulated PTC, although there are certain circumstances where a regulated PTC may be preferable.
Benefits of a Private Trust Company
- Enhanced Control: Family members may actively participate in the PTC structure and therefore fiduciary decision-making. In addition, families may populate the Board and committees with trusted advisors of their choosing and may be able to participate in subsequent appointments. Tax-sensitive powers are typically held by a committee of disinterested advisors.
- Limited Liability: PTCs mitigate fiduciary risk by providing a limited liability business entity to serve as trustee. In addition, advisors who are otherwise prohibited from serving as trustee may be able to participate as an Officer or Board or committee member.
- Flexibility: The PTC provides increased flexibility as to asset and investment management, distribution decisions, and efficient decision-making.
- Beneficiary Education and Involvement: PTCs provide opportunities for additional family involvement as members of the Board, as Officers, or as members of a committee, yielding benefits both in family involvement and control as well as family governance and beneficiary education.
- Cost Savings: PTCs benefit from economies of scale and operate at de minimis profit, often resulting in substantial cost savings over traditional corporate trustee relationships.
How does a PTC function?
The PTC serves as trustee of individual trusts. The PTC Board and committees manage the fiduciary activities and decisions regarding investments, distributions, and administration. In return, the individual trusts pay trustee fees to the PTC, which are used to pay for the expenses of operating the PTC.
Willow Street Group, LLC provides administrative and consulting services to both supervised and unregulated PTC clients. As PTC administrator, Willow Street may provide record management and retention, cash management, bookkeeping/bill pay, compliance, tax reporting and payment coordination, minutes preparation, trust administration, and document execution and signature authority services. In addition, Willow Street may provide Board members, officers, or committee members for the PTC. Our approach is to work with our clients and advisors to analyze the needs of the family and PTC, and identify those areas where we will add value.
Please contact us for more information.