Private family trust companies are frequently confused with family offices, so let’s take a look at the difference between the two. As a starting point, a private family trust company can be a family office, but a family office cannot be a private family trust company. Confusing, right? The difference revolves around the powers granted by state statutes and the services offered by each.
Family offices are generally created as a wealth management solution, offering a wide variety of integrated services with highly personalized focus on serving a family (or group of families) while infusing the values of the family through every facet of business. Family offices take various forms with customized services unique to each family. Frequently, some or all of the following services are offered: tax, accounting & financial, lifestyle, legal, investment, philanthropy and family governance.
A family office can be set up in any state or jurisdiction, but a private family trust company may only be established in states with specific statutes allowing fiduciary powers to be granted to an entity serving family clients. A private family trust company can serve as trustee of family trusts through those fiduciary powers. However, in addition to holding fiduciary powers, a private family trust company can offer family office services, serving as a private family trust company and a family office in one. Like a family office, a private family trust company is as unique as the family it serves.
