Family Trust Companies

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Nevada law provides an efficient way for successful families to manage their business and family affairs for multiple generations by using a Nevada Family Trust Company (NFTC or FTC). Nevada Revised Statutes Chapter 669 (NRS 669) allows families to create an NFTC to serve as a private fiduciary as part of the family office. The NFTC is a unique organization utilized to manage and hold family assets through corporate entities and associated trusts. The private trust company offers significant estate planning and asset protection advantages for a family office. An FTC provides increased privacy, flexibility, and control compared to traditional commercial trustee services. A private trust company also fosters intangible benefits like promoting family leadership, cultural and business succession, and family cohesion when dealing with family business interests.

This article outlines the necessary requirements to establish an NFTC and examines the core features and benefits an FTC offers clients.

A. What is a Family Trust Company?

Nevada is one of the few states with specific legislation permitting families to establish a private FTC. Nevada FTCs are governed by NRS Chapters 669A and 669, which provide the statutory framework for their creation and oversight. Further, the law provides for broad definitions of ‘family members’ in the context of FTCs. This is very helpful as it permits an NFTC to serve as a trustee for family trusts while maintaining flexibility in managing and overseeing ongoing concerns with business holdings.

NRS 669 generally requires that any company offering services as a fiduciary (e.g., trustee, personal representative, guardian of an estate, etc.) be licensed by the Nevada Financial Institutions Division (NFID)1. However, NRS 669A provides an exception for the FTC. An FTC may operate without licensing by the NFID. If licensing the FTC is desired, then the licensing requirements are much less stringent and easier to satisfy compared to a “retail” trust company. The FTC can be utilized as a cornerstone of a family’s business operations, trust management, and succession planning. Nevada law emphasizes flexibility in the administration and interpretation of laws associated with FTCs, which greatly simplifies management and oversight of business holdings2.