The Family Bank: Private Trust Companies (PTC)
The Family Bank: Private Trust Companies (PTC)
Why pay a bank 1% to say “no” to your investment ideas? How to build your own regulated trust company to manage the family dynasty with speed, privacy, and zero AUM fees.
Executive Summary
- The Conflict: Traditional Corporate Trustees (Big Banks) charge fees based on assets (e.g., 1% of AUM). On $100M, that’s $1M/year just for administration. Worse, they are risk-averse and often refuse to hold “Unique Assets” like concentrated stock, crypto, or family businesses.
- The Solution (PTC): You establish a **Private Trust Company** (usually in South Dakota, Wyoming, or Nevada). This creates a legal entity whose sole purpose is to serve as the Trustee for your family’s trusts.
- Governance Control: The PTC is run by a Board of Directors chosen by you (Family Members + Advisors). You create an Investment Committee (to manage aggressive assets) and a Distribution Committee (to handle requests from heirs). You set the rules, not the bank.
Liability Firewall
Why not just use “Uncle Bob”? Naming an individual family member as Trustee exposes them to massive personal liability (e.g., sued by a disgruntled nephew). A PTC is a corporate entity (LLC/Corp). It shields the decision-makers from personal liability, keeping family dinners peaceful.
Mechanic: The Governance Architecture
Flat Fee
Cost Efficiency
Open Arch
Any Investment
Continuity
Institutional Life
Privacy
No 3rd Party Eyes
Simulation: Bank Trustee vs. PTC ($100M Family Estate)
20-Year Administrative Cost Comparison
| Feature | Corporate Trustee (Bank) | Private Trust Company (PTC) |
|---|---|---|
| Investment Policy | Conservative (Standard Models) | Flexible (VC, Crypto, Art, Bus) |
| Decision Speed | Slow (Committee Bureaucracy) | Fast (Family Board Meeting) |
| Succession | Relationship Manager changes | Seamless (Next Gen joins Board) |
“A PTC is the operating system for a dynasty. It replaces a chaotic web of individual trustees with a single, professional, and permanent institution that shares your last name and your values.”
Essential Resources
INTERNAL
BMT Playbooks