Private Trust Companies
Some families do not want an individual relative as sole trustee, and they do not want to hand the whole relationship to a bank. A private trust company is a company appointed as trustee, with a board, a process, and a defined family it serves. We advise on the U.S. consequences of that choice. We do not place the family with a named trustee or a named provider.
Recalde Law Firm, P.A. is a Florida law firm with an office in Miami, Florida. We advise on United States law only. We do not practice Mexican law, and we do not give Mexican tax or succession advice. We do not practice the law of any other country. Formation of a non-U.S. entity, and the local law of that jurisdiction, are matters for local counsel. We handle the U.S. architecture: classification, the documents a U.S. custodian and a U.S. court will read, and coordination with the family's tax adviser.
A private trust company is one trustee option among others. The comparison — an individual, a bank, and a company the family governs — is in choosing a trustee for a foreign trust. The trust the company would serve is on Foreign Trusts.
The company can hold the trusteeship across more than one trust, with minutes, a succession of directors, and a policy for distributions. That is the point. It is not a way to avoid identifying the people who direct it. Banks and tax authorities will ask who the directors are and who can remove them.
Appointing a company does not appoint "the family" in the abstract. The company acts through its directors and officers, within the trust instrument and within its own governing documents. Reserved powers in the trust — a protector, a settlor's consent right — still have to be read against the control test and the grantor-trust rules. A company trustee does not neutralize those powers.
A trust is domestic only if a U.S. court can exercise primary supervision and one or more U.S. persons control all substantial decisions. A U.S. company as trustee is itself a U.S. person, whoever its directors are, and can pull a trust toward domestic status whether or not the deed says it is foreign, but the trust is domestic only if the court test is also met. That may be the intended result. It should not be an accident. See the court test and the control test.
Several states provide for a private trust company that serves a family and not the public. Wyoming is one of them, and it distinguishes an unsupervised private family trust company from a chartered company that is supervised. Formation in Wyoming is Wyoming law, coordinated with Wyoming counsel. The U.S. tax classification of the company, and of the trusts it serves, is the work on this side. See Wyoming private trust companies. We do not hold the company out as a Wyoming licensee, and we do not pitch a formation agent.
A custodian will underwrite the company as trustee the way it underwrites any other trustee: good standing, an EIN, a resolution, and the names of the people who may instruct. A board that cannot produce that file will not open the account. See opening U.S. accounts.
We do not recommend a named trust company, a named bank, or a named administrator. We do not sell the company as a product. If the family wants a regulated public trust company, that is a different charter, with capital, examination, and a regulator, and it is not this page.
A structure we often see for families from Mexico, Argentina, or Panama is a foreign trust that has outgrown an individual trustee — a relative who is aging, or a friend who will not sign for a U.S. custodian — while the family is not ready to give a bank the whole relationship. The same conversation happens with families from Brazil, Colombia, or Chile. The private trust company is a way to put a board and a succession in the trusteeship. It is worth the governance only if the family will actually run the board, keep the minutes, and accept that U.S. classification follows the people who decide.
Home-country recognition of a private trust company, and any licensing in the country where a beneficiary lives, stay with counsel there. We read whether the company, as trustee, leaves the trust foreign or makes it domestic, whether reserved powers in the deed survive the appointment, and whether a U.S. person who directs the company has taken on grantor status or a reporting duty. The tax adviser prepares the returns. The firm assigns responsibility for the classification.
This page is in English. A Spanish page is not part of this publication.
Family offices and private bankers are often asked to "just be trustee." A private trust company is the structured version of that request, and it is still a fiduciary appointment. We scope the U.S. reading with the adviser in the room the family wants. Write as the family, or as the adviser.
Counsel for wealth advisers · Choosing a trustee · Wyoming private trust companies · Foreign trusts · Private wealth
Write as the family, or as the adviser. Tell us who owns the assets and what the documents currently say. We will schedule a conversation. No commitment required.