Family Offices and Private Trust Companies: Injecting Freedom into the Trust Structure

By Matthew Howson, Counsel at Harneys (BVI & Cayman Private Client and Trusts)

E: matthew.howson@harneys.com

Although the last few years has shown continued growth globally for Caribbean succession structures generally, we have seen particular interest from family offices for Private Trust Companies (PTCs). All three of the British Virgin Islands, Cayman Islands and Bermuda offer them, but why the growth of interest?

We see it primarily as a sign of a growing confidence and knowledge among settlors, particularly as against five years ago (which have been years of extensive education in growing civil law jurisdictions). Settlors from jurisdictions newer to trusts are learning:

• to trust professional trustees, meaning we hear fewer questions like “what if they run off with the money?”; but on the other hand

• what they are comfortable with, meaning a familiar corporate entity like a PTC is often seen as attractive to top a trust structure; and

• how structures can be adapted round their circumstances, meaning more bespoke tailoring and discussion, and fewer cookie cutter requests.

A PTC puts the family at the heart of the structure rather than an institutional third party trustee. It also means that the family will not feel frustrated at a trustee’s (perceived) brake on entrepreneurship or on the holding of more high risk-assets.

Why the PTC form

How is a PTC different to any other company? Obviously, the exact form of the PTC will vary between