Technical article
Private Trust Company: What the Capital, the Deposit and the 5-9 Month Wait Buy
A Cook Islands firm says a family company there may act for up to three trusts without a licence.
Picture a family with US$50 million in trusts for the children and grandchildren. Until now a bank has been the trustee. The family wonders about owning the trustee itself, a company whose only clients are the family's own trusts. That is a private trust company. The amount is an example. The question is the one many families ask at this size: is it for me?
What South Dakota asks for
South Dakota publishes the terms, and they are the most complete we have (tier A).
| Item | South Dakota requirement |
|---|---|
| Capital | At least US$200,000 |
| Pledged deposit | US$100,000 |
| Fidelity bond | US$1 million |
| Directors' insurance | US$1 million |
| Application fee | US$5,000, not refundable |
| Supervision fee | 7 cents per US$10,000 of trust assets, at least US$3,750 and at most US$20,000 a year |
| Examinations | US$8,000 to US$15,000, at least every 36 months |
| Minimum tax | Rises to US$25,000 a year after 48 months |
| People and place | A South Dakota resident director and an office in the state |
Those numbers buy a licence to act as trustee, with a state regulator watching. The yearly items come on top of staff, advisers and compliance.
What other places ask for
One law firm's page (tier C) puts the capital for a regulated private trust company at US$200,000 to US$500,000 in the states that allow them.
| State | Capital | Other government items |
|---|---|---|
| Nevada | US$300,000 | US$1,500 a year, due April 1 (A) |
| New Hampshire | US$200,000 | |
| South Dakota | US$200,000 plus US$100,000 pledged | See the table above |
| Wyoming | US$500,000 for a chartered company; an unregulated version has no minimum | US$15,000 charter application; US$7,500 yearly supervision fee under US$3 million of assets, US$12,500 above (a 2021 schedule) |
Tennessee also allows them.
Outside the United States the rules differ. A Jersey firm's guide (tier C) says a Jersey private trust company can avoid a trust-company licence if it serves one family's trusts only, does not serve the public, and is run by a regulated trust company. It needs at least one director and one shareholder, and the directors need not live in Jersey. A Cook Islands firm says a family company there may act for up to three trusts without a licence.
The wait
A trade-press article from 2021 (tier B) says approval takes about five to nine months in the states that allow regulated companies. The regulator reviews the business plan, checks the owners, the board and the staff, and meets the applicants.
Is it for me?
Sources differ on the size where it starts to make sense. One trade-press author says a private trust company rarely makes sense at US$100 million and generally not below US$250 million, with legal fees above US$100,000. A 2026 investor-podcast page on family offices (tier C) calls published thresholds of US$100 million to US$500 million folklore. SmartAsset uses a US$150 million business owner as its example. At US$50 million, the size in our example, the published thresholds sit above the family.
You might say the numbers are small beside a bank's yearly fee, so why not do it at any size. The fixed items above repeat every year, and the staff to run it are extra. A bank's fee is a percentage of the assets. The company's items are set amounts.
You could ask a regulator for the full list of yearly items before comparing with a trustee's schedule. You could also ask which role the family wants to hold: the trustee, or only the adviser who directs the investments.
Who it touches
The family members who would sit as directors, and the children who might follow them. The bank or trust company the new company would replace. The regulator, who examines the company at least every 36 months in South Dakota.
If your family has weighed owning its own trustee, what tipped it one way or the other? Share it here. Another family may be at the same fork.
Figures are estimates for planning, based on public data. Date read: October 2026.
Sources
- South Dakota Division of Banking private trust company mandates (A)
- Nevada Division of Financial Institutions fee notice (A)
- Wyoming Division of Banking fee schedule (A)
- WealthManagement.com on private family trust companies, 2021 (B)
- Alper Law private trust company page (C)
- Mourant guide to Jersey private trust companies (C)
- WealthManagement.com, private trust companies and the hype (B)
- Long Angle page on single family offices, 2026 (C)
- SmartAsset, July 2026 (U)
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