Private Trust Companies – Nevada
September 8, 2020, Private Trust Companies: A Handbook for Advisers, by Lance N McKenzie, McDonald Carano.
Trusts have long been the indispensable tool of estate planning and asset management for wealthy families. A properly drafted trust in a jurisdiction with innovative and advantageous trust laws can minimize tax exposure on assets while insulating assets from creditors for multiple generations. However, state laws may limit the flexibility of a trust by imposing fiduciary duties on trustees, restricting the administration of a trust and its assets, and expanding fiduciary liabilities.
For wealthy families, a corporate structure is attractive for long-term asset management and to preserve wealth through multiple generations, a trust remaining the ideal strategy. A private trust company provides fiduciary and related services to one family. The private trust company is often owned by that family, either directly or through a purpose trust. A private trust company may provide significant advantages over traditional fiduciaries, especially when serving as trustee of an irrevocable discretionary spendthrift trust.
2.What is a Nevada family trust company?
‘Private family trust company’ and ‘family trust company’ are often used interchangeably. Nevada statutes use the latter, so in order to remain consistent with Nevada law, the term ‘family trust company’ will be used in this chapter.
Nevada Revised Statutes (NRS) Section 669.042 defines a family trust company as a corporation or limited liability company that acts or intends to act as a fiduciary and is qualified to serve ‘family members’ as defined by applicable laws in the state of Nevada. A Nevada family trust company may not solicit business from persons that are not considered family members under Nevada family trust laws.1
Typically, a Nevada family trust company is owned by a family member through long-term trusts or a purpose trust.
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