Hi there,
I have been reading up on estate planning for myself and gotten quite confused.
I am not planning to leave anything behind or doing any estate planning, I am quite young! :)
I am mere.ly asking out of intellectual curiosity as I can't make head or sense of the flowchart.
I've been reading up on dynasty trusts.
Many wealthy families create a so-called private trust company (PTC) to act as a privately held trustee company only for the trusts of one family. instead of transferring the family wealth to a company that acts as a trustee for hundreds of trusts, the family has its own trustee which is not shared with others. This reduces risk that the trusts are affected by problems relating to the trusts of another family because they share the same corporate trustee. using a PTC makes it easy to transfer the legal ownership of the trust assets to new trustee. the PTC is a company limited by shares. And it is common to establish a separate purpose trust whose only purpose it is to hold the shares of the PTC.
But again a trustee is needed for the purpose trust holding the shares of the PTC. In most cases, a corporate trustee by a financial services company is used.
My question is why would a purpose trust be used? Wouldn’t it be easier if to skip that step and have the shares of the PTC to be held in trust by a corporate trustee?
My understanding is that as the assets of the trusts (i.e. bank deposits, real estate, the shareholding of businesses) are held in trust by the PTC, all the corporate trustee owns is the shares in the PTC?
Or does it mean by default that because the PTC is the legal owner of the assets in trusts, does the corporate trustee, by holding the shareholding of the PTC in trust, also ultimately becomes the assets’ legal owner as well?
Submitted February 14, 2018 at 12:24AM by curioustraveller1985 http://ift.tt/2soMRrC
