Private Trust Company

Privacy, Control, and Tax Optimization for Multiple Generations

What is a Nevada Family Trust Company (Commonly known as a Private Trust Company)?

Also known as a “private trust company,” a Nevada Family Trust Company is a corporation or limited liability company (“LLC”) acting as a fiduciary to serve “family members” according to Nevada trust law. An FTC is typically owned by a family member through multigenerational trusts. In Nevada, the term family member is quite broad.

What is a Family Member?

For the purpose of Nevada Family Trust Companies, Nevada statutes (NRS Chapters 669A and 669) define a family member as persons having 10 degrees of lineal kinship (direct relation) and persons having 9 degrees of collateral kinship (related to a common ancestor) of the FTC’s designated relative.

Why Establish a Nevada Family Trust Company?

Most often, we see families with successful companies with continued expected growth and spanning over generations establish FTCs. However, we also see many families with unique assets with uncommon expertise needed establish FTCs as well.

An FTC, when properly established and structured, may take advantage of the many estate planning and tax advantages Nevada offers as a trust jurisdiction. Families outside of Nevada can create FTCs by naming a Nevada trustee, such as Crawford Trust.

Advantages Families Look for when establishing an FTC

Continuity

A well-structured FTC has clear plans for succession and maintenance of a family’s values and the FTC’s objectives.

Control

An FTC may only serve “its family,” and may hire investment advisors and in-house advisors dedicated to asset classes. An FTC may act as Trust Protector and willfully add and remove advisors and trustees accordingly.

Flexibility

Adapt to evolving family circumstances with properly drafted trusts and decanting capabilities.

Manage Unique Assets

Traditional fiduciaries may avoid some assets (like a family business) because of not understanding the assets. An FTC includes family members that understand the business, its value, and its growth potential over many generations.

Less Liability for Decision-Makers

Less personal liability makes an FTC attractive to highly qualified professionals to serve an FTC as an FTC is typically structured as an LLC.

Long-Term Tax and Cost Savings

The initial cost of establishing an FTC is significant. However, over generations, an FTC manages risk and controls costs between the tax savings and the focused administration of an FTC.

Family Wealth Transfer and Income Tax Planning

By utilizing custom trust solutions (e.g., GRATs, QPRTs) with dynasty provisions without redundant time and expense expenditures over multiple generations.

What is a Designated Relative?

A living or deceased ancestor designated by the FTC. FTCs are typically multigenerational solutions.

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Licensed or Unlicensed Trust Company? Nevada Allows Both

Nevada statutes support both licensed and unlicensed FTCs. But, to qualify for the Family Office Exemption (advisors exempt from registering with the SEC), the FTC must be licensed. Also, a licensed FTC has fewer operational limitations, better risk management, enhanced asset protection, favored by outside institutions, and the nominal flexibility to include the term “trust” in the company’s name.

Summary of minimal requirements for both unlicensed and licensed Nevada Family Trust Companies

Unlicensed FTC

  • Must have a physical office in Nevada holding
  • Nevada office must hold contact information regarding family members and employees
  • LLC Operating Agreement
  • Articles of Incorporation
  • State and local business licenses

Licensed FTC (also must have the unlicensed requirements)

  • At least one FTC officer must live in Nevada
  • A registered agent residing in Nevada
  • Bank account with a Nevada branch
  • $300,000 or greater in Stockholder equity
  • Application fee ($3,000)

Capital Requirements

At Crawford Trust, we recommend an asset valuation of at least $50mm before considering an FTC.

Crawford Trust specializes in Nevada Family Trust Companies. For more details and information about FTC requirements or to discuss a potential FTC for your family, reach out to us today.

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Insights: A Deeper Dive into Nevada Trustee Services