Public or Private
You and your family must choose a trustee congruent with not only your financial objectives, but your broader goals and objectives. The trustee is bound by the rules of the trust, but are most often afforded discretion when making decisions.
A public trust company provides trust services to the general public. They vary in how widely they advertise their services, but they serve multiple families, at minimum, and serve the general public so to speak. The two benefits of a public trust company are a reduced workload on your family, and independence from the beneficiaries. The downside is the increased cost versus a private option. Trust companies generally charge a percentage of assets under management. Over time, this can add up.
A private trust company serves only one family. It allows increased control, lowers cost and beter protects your privacy. The only downside is having family involved in intimate family matters. Sometimes tough decisions are better handled by an independent party who can claim their hands are tied.
Public trust companies offer better continuity over time and assistance with trustee duties. These factors matter when a trust is established for perpetuity, or there is not a lot of family willing or able to take on the duties of being a trustee.
Another benefit is the independence of a public trust company. There are situations where you may not want the beneficiary to retain influence over the trustee. For example, if you have several children but one suffers lifestyle problems. You do not want your spendthrift child harassing the trustee (their sibling) everytime they want money. Nor does the sibling want to be in the position of controlling their sibling's money. This can easy spoil the relationship. In this case an independent trustee is clearly preferable.
Private trust companies (PTCs) provide many benefits and are often preferable for self-settled trusts. They allow greater control and don't require sharing information with a third party. This is especially appealing given recent large data breaches such as the Panama Papers.
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