In certain instances, the Trustmaker or client may have concerns over the costs of hiring an Independent Trustee, such as a Public Trust Company, Banking Institution, or Corporate Fiduciary to serve as Trustee of their Trust. The Trustmaker may also have concern turning control of the Trust, and assets held by a Trust, over to a Trustee with whom they do not have a past working relationship. In lieu of selecting a Bank, Public Trust Company, Independent Trustee or Family Member to serve as Trustee of their Trust, the client may want to consider establishing a Wyoming Private Trust Company to serve as Trustee of the Trust.
The Characteristics and Benefits of a Private Trust Company are as Follows:
- Formation. A Wyoming Private Trust Company is a Limited Liability Company or Corporation formed under the laws of the State of Wyoming, with the specific purpose of serving as Trustee for a Trust or a select number of Trusts. The Private Trust Company is not permitted to serve as Trustee for the public at large and is only permitted to serve as Trustee of Trusts established for the benefit of one particular family.
- Owner. The owner of the Private Trust Company is typically the client, or members of the client’s family. The Private Trust Company will have Managers, if the Private Trust Company is a LLC, or will have Officers or Directors, if the Private Trust Company is a Corporation. The Managers, Officers, or Directors of the Private Trust Company are typically members of a particular family or advisors of the family.
- Committees. The Private Trust Company will typically designate certain committees relating to operation of the Private Trust Company and the administration of the Trust(s) served by the Private Trust Company. These committees may include an Investment Committee, Distribution Committee, or a Trust Administration Committee. Oftentimes, members of the client’s family and family advisors will serve on the committees, subject to certain restrictions.
- Benefits of Wyoming. Wyoming is one of the best states in the United States to form a Wyoming Private Trust Company, due to the ease of formation and administration. Wyoming is one of a limited number of states where there are no capital contribution requirements to form a Wyoming Private Trust Company, and is unregulated by the State Division of Banking. Almost all other states in the nation have minimum capital contribution requirements, which requires anywhere between $200,000 and $500,000 be contributed to the Private Trust Company, upon formation, or otherwise require that the Private Trust Company comply with certain State regulatory requirements, in order to operate as a Private Trust Company. This makes Wyoming an attractive jurisdiction for those clients who would prefer to designate a Private Trust Company to serve as the Trustee of their Trust. The client can then select certain family members, advisors, or individuals to serve as Managers, Directors, Officers, Investment Advisors, or Committee Members of the Wyoming Private Trust Company.
- Service Agreements. The Private Trust Company can enter into service agreements with trusted advisors, investment advisors, financial advisors, family offices, trust companies, certified public accountants, and legal advisors regarding the administration of the Private Trust Company.
- Operating Agreement / Bylaws. The operations of the Private Trust Company are governed by the Operating Agreement and Bylaws of the Corporation. Care must be given to ensure that the Operating Agreement or Bylaws are drafted to ensure that the Private Trust Company does not run afoul of estate tax inclusion issues. The IRS has issued certain Private Letter Rulings and an IRS Notice that provide non-controlling guidance regarding the structuring of Private Trust Companies. (PLR 200546055, PLR 200548035, PLR 200523003 and IRS Notice 2008-63)
Wyoming Family Office
In addition to establishing a Wyoming Private Trust Company, the Majors Law Firm, P.C. can assist high net worth families with the formation and management of a Family Office in the State of Wyoming, for purposes of managing and administering a Private Family Trust Company, family trust assets, and closely held businesses. The Majors Law Firm, P.C. is able to offer the following services, as part of establishing and managing a Wyoming Family Office:
- Formation and administration of a Wyoming Private Family Trust Company.
- Wyoming Registered Agent.
- Wyoming Mailing Address.
- Wyoming Physical Address.
- Mail Forwarding.
- Wyoming Telephone Number.
- Wyoming Bank Account.
- Legal Counsel regarding the administration of family trusts and the family office.
- Officers, Directors, Managers or Agents.
- Physical Office Presence.
- Assistance with filing of Wyoming Annual Reports with the State of Wyoming.
- Assistance with the preparation of Annual Meeting Minutes and Resolutions for family Business Meetings.
- Use of a conference room for business and family meetings.
- Counseling and education of family members on the administration of family assets, family trusts and the family office.
- Tax and administrative advice.
- Coordinating with family advisors, tax professionals, investment managers and family legal counsel on the administration of the Wyoming Family Office.
A Wyoming Private Trust Company can serve as Trustee of the following types of Trusts:
- Asset Protection Trust. With Asset Protection Trusts and Offshore Asset Protection Trusts, there is a requirement that at least one of the Trustees be a resident of, or incorporated under the laws of the jurisdiction where the Trust is formed. For example, a Wyoming Domestic Asset Protection Trust requires that at least one of the Trustees be a resident of the State of Wyoming, or a company authorized by the State of Wyoming to act as a Trustee. In lieu of hiring a Wyoming Resident, a Wyoming Bank, or a Wyoming Public Trust Company, the client may be able to facilitate the formation of a Wyoming Private Trust Company to serve as Trustee of the Wyoming Asset Protection Trust.
- Wyoming Dynasty Trust. The Wyoming Private Trust Company may also serve as Trustee of Wyoming Dynasty Trust. In order to establish a Wyoming Dynasty Trust, which can last for up to 1,000 years, the trust is required to be governed by the laws of Wyoming and the trustee must maintain a place of business in Wyoming, administer the trust in Wyoming, or be a resident of Wyoming. Rather than hiring a Wyoming Bank or Resident to serve as Trustee of the Wyoming Dynasty Trust, the client may consider establishing a Wyoming Private Trust Company to serve as Trustee of the Trust.
- Current Family Trusts. For clients or families that currently have Trusts in place which require a Corporate Fiduciary/Trustee to serve as Trustee of the Trust, a Wyoming Private Trust Company may qualify as a Corporate Fiduciary, which can serve as the Trustee, in lieu of a Bank or Public Trust Company. The Private Trust Company can also help to bring the administration of various family trusts under the administration of one Private Family Trust Company.
- Qualified Domestic Trust. A Wyoming Private Trust Company may serve as the U.S. Trustee of a Qualified Domestic Trust established for the benefit of a surviving spouse that is not a United States Citizen.
- Wyoming Trust. Due to the favorable trust legislation and potential income tax benefits associated with establishing a Trust in the State of Wyoming, the appointment of a Wyoming Private Trust Company can help to establish a sufficient connection to the state of Wyoming, bringing the Trust under the jurisdiction of the state of Wyoming and its favorable tax and trust laws.