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We can help you understand the benefits of a Private Trust Company and whether it is the right planning solution for you.
We are seeing a growing trend in the use of private trust company structures by clients and their advisers who are seeking to maintain flexibility and mitigate against loss of control.
Growth has been evidenced within Hawksford with a number of new private trust company structures being established over the past two years and several enquiries relating to the migration of structures from British Virgin Islands (BVI) or Cayman Islands to Jersey.
Hawksford was recently approached by an adviser acting on behalf of a Middle Eastern family who had an existing fiduciary structure administered through the BVI. The structure held assets, including real estate, land, investment portfolios and works of art.
While the existing structure was ‘fit for purpose’, the client wanted to take advantage of Jersey’s regulatory environment and excellent infrastructure.
The client also wanted to maintain a degree of control over the trust affairs and understood that a private trust company enabled them to be on the board of directors, and to appoint several other trusted family members and advisers.
We created a new structure, using a Jersey Foundation to own the shares of a newly incorporated Jersey registered private trust company, which in turn acted as trustee for eight underlying Jersey proper law trusts, with the existing assets to be held through newly incorporated Jersey investment holding companies.
The previous BVI structure was then terminated on the transfer of assets to the newly established Jersey structure.
A Private Trust Company is a privately owned company incorporated specifically to act as trustee of one or more family trusts. Like any other company, a private trust company is run by its board of directors, who will be charged to make trustee decisions.
Whilst run by the board of directors, private trust companies (and the underlying trusts for which they act as trustee) are usually administered by a professional trustee who is experienced in carrying out trust and corporate administration but with the added benefit of maintaining flexibility and mitigating against loss of control.
The board of directors of the private trust company generally include family members who can ensure that the wishes of the founder of the trust (often the patriarch and/or matriarch of the family) are given proper consideration and to enable them to become familiar with, and participate in, decisions affecting the family assets.
These assets may include the family business interests and the private trust company can be used to provide the next generation with training and instruction for their future role in the business. In circumstances where it is impractical or undesirable for family members to be in direct control of the private trust company, trusted advisers of the settlor can be appointed to the board. In most cases, at least one member of the management team of the Jersey regulated company providing the administration services would also be a director of the private trust company.
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