On 27 April 2026, Hugill & Ip hosted a highly informative STEP seminar featuring distinguished speakers Richard Wilson KC and our Alfred Ip, who provided attendees with a comprehensive analysis of Private Trust Companies (PTCs). The event attracted trust and estate professionals eager to explore the benefits, risks, and best practices associated with PTCs in wealth management and succession planning.
The session commenced with Alfred Ip framing the evening’s discussion around the fundamental question of whether Private Trust Companies represent an optimal solution or if they present unforeseen challenges in practice. Richard Wilson KC, drawing on his extensive experience in trust litigation, provided nuanced perspectives based on his observations from both sides of contentious proceedings.
The Appeal of Private Trust Companies in Wealth Management
Wilson articulated that PTCs offer distinct advantages from a planning perspective, particularly addressing the reluctance of wealth creators to relinquish control of their assets to traditional trustees. These structures provide a mechanism for maintaining influence over family assets while ostensibly obtaining the benefits of trust arrangements. However, Wilson emphasized that difficulties frequently emerge when PTCs function without adequate professional oversight, creating governance deficiencies that can lead to substantial disputes.
Theory vs. Implementation: The Reality of PTC Governance
A central theme of the discussion was the distinction between theory and implementation. While PTCs present an elegant theoretical solution to succession planning challenges, their practical execution often falls short of the ideal.
The speakers referenced the Wong and Grandview litigation as an instructive case study demonstrating how family dynamics and governance shortcomings can compromise even well-conceived structures. In this instance, representation imbalances on the PTC board created power asymmetries that ultimately resulted in protracted litigation.
Navigating Fiduciary Duties Amid Family Dynamics
The speakers examined the professional challenges inherent in serving on PTC boards. Alfred Ip highlighted the precarious position of professionals who must navigate family dynamics while maintaining fiduciary obligations. These professionals often find themselves outvoted on critical decisions or face removal when they attempt to enforce proper governance standards, thereby undermining the integrity of the structure.
Mitigating Risks: Stress-Testing and Clear Alternatives
Both speakers advocated for periodic “stress testing” of Private Trust Companies arrangements to identify vulnerabilities and ensure continued robustness against evolving circumstances. This process evaluates the structure’s resilience in the face of potential challenges, including family discord, legislative changes, or altered economic conditions.
When discussion expanded to include audience participation, practitioners confirmed encountering significant governance challenges with PTCs. One professional observed that these structures often prove problematic because they allocate excessive decision-making authority to individuals without adequate guidance, while another noted that historical PTC configurations where settlors maintain shareholder control create fundamental governance deficiencies.
The Rise of Judicial Skepticism and Reserve Powers Trusts
Wilson proposed that settlors seeking to maintain influence might benefit from more transparent mechanisms such as reserve powers trusts rather than PTC structures that present an appearance of independence while enabling backdoor control. He emphasized that contemporary judicial approaches display increasing skepticism toward arrangements that obfuscate actual control mechanisms.
Succession Challenges After the Settlor’s Passing
The discourse addressed succession challenges within PTCs, particularly the transition of control following a settlor’s passing. Family members assuming directorial responsibilities may lack the necessary expertise or consensus to manage the structure effectively, potentially triggering disputes among beneficiaries. This underscores the necessity for robust governance frameworks and professional involvement to mitigate such risks.
The speakers concluded that PTCs can serve as valuable vehicles when appropriately structured and administered, particularly for complex family situations requiring customized approaches. However, they require professional oversight, governance protocols, and regular evaluation to prevent them from becoming catalysts for family discord.
Despite the identified challenges, only a single attendee indicated agreement when asked if PTCs were fundamentally flawed, suggesting that most practitioners continue to recognize their utility when implemented with appropriate safeguards.
Following the formal presentation, attendees engaged in continued discussions during a networking reception, with many expressing appreciation for the practical insights conveyed during this substantive educational event.
