Family Offices are a common operational element for wealthy families. In some instances, those family offices have held trust powers, thereby creating an in-house “Private Family Trust Company”. In recent years, a separate PFTC has become more attractive to families seeking control over their fiduciary activities.
Establishing a Private Family Trust Company (PFTC) through Lenox separate from the Family Office (FO) offers the best flexibility in terms of estate planning and family governance. Often the choice is to engage an institutional fiduciary, in the form of a retail trust company for example. Public or “retail” trust companies can have their limits, however — they are often not experienced in handling complex and nuanced matters, such as family business operations or private equity investments. Lenox as your partner eliminates these problems.
A PFTC managed by Lenox offers benefits that overcome the limitations of retail trust companies:
With years of experience working with families, Lenox knows that organizational, operational and leadership abilities vary or may be lacking across family units. With Lenox as the PFTC manager, family members can engage by sitting on the Board of Directors, or on investment or distribution committees for example — a voice that would not be preserved with a public or retail trust institution.
When trusts or estates hold non-traditional assets (hedge funds, private equity, international investments, closely-held businesses, mineral properties, natural resources, art and real estate), a public or retail trust institution may not be the best fiduciary. Pooled assets for an entire family, rather than many individual trust assets, may offer better investment access or opportunities.
Individuals placed in trustee roles often lack the knowledge, skills or experience needed to properly serve. External corporate trustees can experience staff turnover, be acquired, or simply cease doing business. A PFTC managed by Lenox eliminates such problems, affording uninterrupted oversight and management of trusts, developing family leadership over generations.
A PFTC can eliminate the need for a family office to be registered with the SEC or State as an RIA. Lenox can organize the PFTC in such a manner that disclosure to regulatory agencies is kept at a minimum, protecting privacy while minimizing complexity and compliance requirements.
A PFTC serves only “its family.” It maintains exclusive authority to hire investment and other professionals and advisors as needed, and may act as Trust Protector with the ability to add and remove advisors accordingly.