Private wealth · Succession

Private trust company for a family operating business

A second-generation industrial business where no institutional trustee would hold the shares, and no single family member could be trusted with all of them.

5 monthsAnonymised · published with consent

The brief

A founder in their seventies owned an industrial group outright. Three children were involved in the business to different degrees. Institutional trustees declined to hold concentrated operating risk, and the founder was unwilling to give discretion to a party that did not understand the business.

  • The founder wanted continuing influence over investment decisions without collapsing the trust.
  • No single child could control the trustee, and the governance had to survive the founder's death.
  • The family had beneficiaries in three tax jurisdictions, so CRS reporting had to be mapped before signing.
  • The operating business could not be disrupted; banking covenants referenced the shareholder.
Structure diagram
Purpose trust, PTC, family trust and the business

Ownership of the trustee is deliberately placed outside the family, so no beneficiary controls the entity making decisions about them.

Trustee ownership
Non-charitable purpose trust
Owns the PTC shares
Ensures no family member owns the trustee of their own trust.
Trustee
Private trust company
Board: 2 family, 2 independent, 1 chair
Casting vote with the independent chair; quorum requires at least one independent.
Trust
Family discretionary trust
Letter of wishes
Protector holds consent rights over trustee removal and capital distributions.
Assets
Holding company
Group parent
Keeps the trustee one step from direct shareholder liability.
Operating group
Industrial business
Investment portfolio
Diversification
Built deliberately so the family is not entirely exposed to one trade.
How value moves
Dividends
Business distributions rise to the holding company, then to the trust, then to beneficiaries at the PTC board's discretion.
Decisions
Every distribution is minuted with the reasoning, including the occasions on which the board declined a family request.
Reporting
Trust classified for CRS at the outset; settlor, protector and distributing beneficiaries identified as reportable controlling persons.

How it was built, in order

  1. 01
    Governance before entities

    Six weeks spent agreeing how decisions would be made — board composition, quorum, deadlock — before any company was incorporated.

  2. 02
    PTC ownership resolved

    PTC shares placed in a non-charitable purpose trust so no family member owned the trustee.

  3. 03
    Reserved powers drafted narrowly

    Founder retained investment direction and a veto over the sale of the business, but not over distributions to beneficiaries.

  4. 04
    Holding layer interposed

    A holding company placed between the trust and the operating group, agreed with the lender in advance.

  5. 05
    CRS mapped

    Classification and reporting flows documented for all three beneficiary jurisdictions before the first distribution.

  6. 06
    First year supervised

    We sat in on the first four board meetings to establish the minuting standard, then stepped back.

Outcome
  • Trustee decisions made by a board that understands the business, with independents holding the balance.
  • Founder retained meaningful influence within limits that survive scrutiny.
  • Reporting obligations identified and satisfied from the first year rather than discovered on audit.
  • Succession no longer depends on a will, and the governance survives the founder.