High-net-worth families face unique challenges when it comes to preserving wealth across generations. Traditional estate planning tools like wills and trusts provide a strong foundation, but for families with complex assets, significant business holdings, or multigenerational planning needs, additional strategies may be necessary.

One option that has grown in popularity is the Private Family Trust Company (PFTC)—a legal entity formed to serve as trustee for a family’s trusts. Unlike corporate trustees, which often impose rigid rules and lack personal connection, a PFTC allows families to retain more control, privacy, and flexibility in managing their legacy.

Because of the legal and tax complexities involved, working with an experienced attorney for wills and trusts is essential when considering this option.

What Is a Private Family Trust Company?

A Private Family Trust Company is a state-chartered entity—often an LLC or corporation—that serves as trustee for one family’s trusts. Instead of hiring a bank or corporate trust department, the family creates its own entity to manage assets, distributions, and administration.

This structure is especially attractive for high-net-worth families because it provides trustee services “in-house” while still benefiting from the protections and governance of a formal legal entity.

Benefits of Using a Private Family Trust Company

Control and Flexibility

A PFTC allows family members to participate in trustee decisions—something traditional corporate trustees typically restrict. This flexibility means families can make investment decisions, structure distributions, and oversee long-term strategies with their own values and priorities in mind.

Privacy and Confidentiality

Unlike corporate trustees, which may expose sensitive family details to outside institutions, a PFTC keeps financial affairs private. All decisions remain within the family and trusted advisors, reducing the risk of public exposure.

Consolidation of Wealth Management

For families with multiple trusts, business entities, and investments, administration can become fragmented. A PFTC centralizes oversight, simplifying decision-making and creating consistent governance across the family’s estate.

Tax and Estate Planning Advantages

When established properly, a PFTC can provide tax efficiencies—such as reducing estate and gift taxes, coordinating wealth transfers, and supporting multi-generational planning. The guidance of an attorney for wills and trusts ensures compliance with applicable laws and helps maximize these benefits.

How a PFTC Fits into a High-Net-Worth Estate Plan

A PFTC is not for every family, but for those with significant wealth, it can be transformative. Consider these scenarios:

• Families with closely held businesses who want consistent oversight during generational transitions.
• Estates that include large real estate portfolios or international assets.
• Families seeking to maintain long-term control over how charitable giving or family legacy funds are managed.

In these cases, the PFTC works in tandem with traditional estate planning tools such as wills, revocable and irrevocable trusts, and succession plans. It provides structure while still honoring the family’s personal wishes and values.

Learn the difference between wills and trusts.

Steps to Establish a Private Family Trust Company

1. Consult with an attorney for wills and trusts to determine whether a PFTC is appropriate for your estate plan.
2. Select the state of formation. In this case, most likely Maryland.
3. Create organizational documents. Draft bylaws, operating agreements, and governance policies.
4. Obtain state approval (in some jurisdictions, regulatory filings or charters are required).
5. Fund the PFTC. Transfer trustee responsibilities and associated assets.
6. Develop governance policies. Assign roles for family members, establish compliance systems, and create decision-making frameworks.

The process requires collaboration among attorneys, CPAs, and financial advisors to ensure legal compliance and seamless integration with the broader estate plan.

Risks and Considerations

While powerful, PFTCs are not without challenges. Families should be aware of:

• Regulatory and compliance requirements. Some states impose oversight and reporting obligations.
• Cost of administration. Formation and ongoing maintenance may be expensive, making PFTCs most practical for ultra-high-net-worth families.
• Family dynamics. Without clear governance structures, disagreements may arise among members involved in decision-making.

These risks underscore why legal guidance is so critical. An estate planning attorney ensures the company is structured correctly and functions as intended.

Why Work With an Attorney for Wills and Trusts?

A Private Family Trust Company is not a “DIY” solution. It requires careful legal, tax, and governance planning. An attorney for wills and trusts will:

• Customize the structure to fit your family’s assets and goals.
• Ensure compliance with state and federal trust laws.
• Coordinate with other estate planning tools (such as trusts, charitable foundations, or succession plans).
• Provide compassionate guidance for sensitive family decisions that impact legacy.

Ultimately, an attorney provides the peace of mind that your wealth will be preserved and passed on exactly as you intend.

Conclusion

A Private Family Trust Company can be a powerful tool for high-net-worth families who want more control, privacy, and efficiency in their estate planning. But because of the complexities involved, it’s essential to approach the process with professional guidance.

By working with a skilled attorney for wills and trusts, your family can establish a trust company that supports your legacy for generations to come.

FAQs

1. What is the difference between a Private Family Trust Company and a traditional trust?
   A PFTC serves as the trustee for multiple trusts, centralizing control within the family. A traditional trust relies on individual or corporate trustees.
2. Which states allow Private Family Trust Companies?
   Maryland, Nevada, South Dakota, Wyoming, and several others have favorable laws for PFTCs.
3. How much wealth is needed to justify creating a PFTC?
   Typically, families with $100 million+ in assets benefit most, but it may also make sense for smaller estates with complex needs.
4. Can a PFTC reduce estate or gift taxes?
   Yes, when properly structured with guidance from an attorney, a PFTC can offer tax efficiencies.
5. Why should I hire an attorney for wills and trusts instead of relying on financial advisors alone?
   Financial advisors focus on investment strategies, while attorneys ensure legal compliance, asset protection, and alignment with your overall estate plan.
6. How does a PFTC protect family privacy?
   Unlike corporate trustees, a PFTC keeps sensitive financial matters within the family structure, reducing exposure.
7. What are the ongoing responsibilities of running a PFTC?
   Governance meetings, regulatory filings, and compliance systems must be maintained, typically with professional support.