Protecting Trustees The Case for Private Trust Companies

Why It Matters

For families and advisors managing significant wealth, using a private trust company reduces personal liability, improves trustee recruitment, and streamlines trust administration—lowering legal risk and protecting governance continuity.

Summary

A private trust company shields individual trustees from the unlimited personal liability that comes with serving in that role. While indemnification and reimbursement provisions can mitigate some risk, placing fiduciary responsibility at the corporate level concentrates liability within the trust company rather than on individuals. This structure makes it easier to recruit skilled trustees who might otherwise decline due to exposure, and allows family members or advisors to participate on committees without personal legal risk. Overall, a private trust company simplifies governance and preserves the pool of qualified fiduciaries.

Original Description

Steve Lockshin of Vanilla (www.justvanilla.com) breaks down why individual trustees carry unlimited personal liability and how a private trust company structure better protects the people you want most in that role.

Get the full breakdown and insights: https://www.familyofficeassociation.us/post/the-mistakes-that-quietly-erode-family-office-wealth-and-how-to-avoid-them