Sterling House Trust: A 2023 profile on private trust companies

Private trusts have become an increasingly popular option for high net worth individuals seeking to manage their wealth and plan for the future.

A private trust is a legal arrangement in which a trustee holds and manages assets on behalf of a beneficiary or beneficiaries. This can provide a range of benefits, including increased control over assets, greater privacy, and more flexibility in estate planning.

Additionally, private trusts can offer tax advantages and protection from creditors. As a result, many high net worth individuals are considering private trusts as a way to safeguard their wealth and ensure that it is managed in accordance with their wishes.

Sterling House Trust, based in the New Zealand city of Auckland, offers financial services such as asset protection, overseas property ownership, financial management, foreign currency, and more to serve such a demand.

In this article, we will take a look at Sterling House Trust, and what high net worth individuals should consider when making a private trust for the management of their wealth.

If you want to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).

What is Sterling House Trust?

Unlike other private trusts, Sterling House Trust claims to operate differently by providing a secure and private environment where a select group of people can enjoy access to premium goods and services.

For its clients, Sterling House Trust employs a team of expert fund managers that scour the markets and work with reputable organizations around the world to construct a carefully chosen portfolio of programs.

Members can participate in these activities based on their unique requirements, areas of interest, and financial situations.

The international headquarters of Sterling House Trust may be found in Auckland, New Zealand, with additional offices in London, United Kingdom.

The Sterling House Trust network was set up so that its users could feel safe taking advantage of business opportunities in many markets and fields around the world.

Purpose and Scope of the Sterling House Trust

In order to ensure that the trust has control over the breadth and quality of the services provided by the company’s proprietary Platform, it was set up within the context of a trust.

The safety and privacy of Sterling House Trust members is what the company considers its number one priority.

Sterling House trustees aim to keep watch over their clients’ best interests and make sure the Platform keeps providing top-notch service.

Sterling House Trust claims that its trustees of the company exercise strict management and are always on the go, searching for and narrowing down promising chances in foreign markets. It uses the same rigorous criteria when vetting potential providers and business partners for inclusion on its Platform.

Through its global network, Sterling House Trust Platform members have access to a wide variety of international opportunities, including but not limited to: asset protection, international property ownership and management, alternative and direct ownership, estate planning, banking services, foreign exchange, card services, alternative investment, and lifestyle services.

Because of its private nature, it is very difficult to find out more about how Sterling House Trust operates and interacts with its clients without engaging with the company directly.

Because of this, we recommend high net worth individuals who are interested in conducting business with Sterling House Trust to exercise caution and do their due diligence before working with them.

We have provided additional information below about all you need to know about trust funds and working with private trust companies for you to make informed decisions before you set up your own trust.

What is a trust?

A trust fund is a type of legal structure used for estate planning and the management of a person’s or group’s assets. Assets such as cash, real estate, equities, bonds, a business, or a mix of these can all be held in a trust fund.

A trust requires the involvement of three people: a grantor, a beneficiary, and a trustee. The trustee is responsible for the management of the trust assets and must do so in the best interests of the grantor and the beneficiary.

Different types of trust funds can be established with various requirements. They provide participants with specific tax breaks, as well as financial safeguards and assistance.

To plan one’s estate is to make arrangements for the management and distribution of one’s assets and other financial matters upon one’s death.

Money in the bank, investments, personal belongings, real estate, life insurance, pricey artwork, and outstanding debts are all included. While wills are the most typical estate planning document, trust funds are also widely used.

In order to set up a trust fund, you will need the following three people: The grantor, who creates the trust and places assets within it; One or more people who will benefit from the assets being managed; and the trustee as the impartial third party.

The trustee could be any person, trust company, or another professional fiduciary, entrusted with the responsibility of overseeing the assets in question.

The grantor typically makes plans that are carried out after their death or when they are no longer capable of making decisions for themselves.

The trustee’s duty as the grantor’s fiduciary is to carry out the grantor’s wishes. Allocating their current living costs or future educational costs (such private school or university tuition) is a common example of this. Another option is a single lump sum paid out to the recipient.

Both the grantors and the recipients of a trust fund are afforded legal and financial benefits. Here’s an example:

Certain types can shield the grantor’s assets from the grantor’s creditors in the event those creditors go for the grantor for unpaid obligations.

They spare the estate the trouble of going through probate, which is required when a person dies intestate, or without a will.

After the grantor passes away, the trust fund’s assets are dispersed to the beneficiary(s), although in some cases, the trust fund can lower the amount of estate and inheritance taxes owed.

After the death of the grantor, the value of their estate is subject to an estate tax, while the beneficiary’s share of the estate is subject to inheritance tax.

When hundreds of millions of dollars (or even a few billion) are at risk for numerous generations of a family or other entity, wealth and family arrangements can become rather difficult. In this way, a trust fund can accommodate a grantor’s wishes in ways that would otherwise be impossible.

Trust funds, however, are not restricted to the extremely wealthy, contrary to popular belief. Everyone, regardless of their financial standing, can benefit from them. Consult a financial advisor to determine which type of fund is most appropriate for your situation.

What are irrevocable and revocable trust funds?

There are two types of trusts: those that can be changed and those that cannot.

Revocable Trust Fund

During his or her lifetime, the grantor of a revocable trust fund has greater authority over the trust’s assets. After the grantor’s death, the trust’s assets can be distributed to anyone the grantor chose as beneficiaries.

This type of trust, sometimes known as a “living trust,” is a legal mechanism for passing wealth on to future generations.

The assets are distributed quickly to the designated beneficiaries because probate is not required. Since the assets held in a living trust are not made public, the process of distributing an estate is highly confidential.

While the grantor is still living, he or she can make amendments or even revoke the entire thing.

Irrevocable Trust Fund

It is very difficult to alter or terminate an irrevocable trust. The grantor can receive significant tax benefits from this arrangement in exchange for “donating” control of the assets to the trust. Irrevocable trusts typically circumvent the probate process.

Are there other types of trust funds?

There are a number of subcategories that can be applied to trust funds, both revocable and irrevocable. The assets involved and, more significantly, the intended recipient will determine the specific set of regulations and conditions that apply to each type.

If you need help deciphering the finer points of these vehicles, a tax or trust attorney may be your best bet. Remember that this is by no means a complete list.

• Asset Protection. A person’s assets can be shielded from potential lawsuits by using an asset protection fund.
• Blind Trust. To avoid even the appearance of bias, this fund operates in complete darkness. Therefore, the donor and the beneficiary of the trust fund are in the dark about its holdings and management. However, the trustee does have control over the fund.
• Charitable Trust. Non-profit organizations or the general public can both gain from a benevolent trust fund.
• Included in this category is the annual payment making Charitable Remainder Annuity Trust (CRAT). With a Charitable Remainder Unitrust, the donor receives a tax benefit for their generosity while also providing a steady stream of income to a designated beneficiary for as long as the trust is in effect.
• Generation-skipping Funds. A trust that skips a generation and provides tax breaks if the beneficiary is a grandchild or someone at least 37 and a half years younger than the grantor.
• Grantor Retained Annuity. To reduce the amount of inheritance tax owed, a grantor may set up a grantor retained annuity to hold onto any gains in value made by the grantor’s assets.
• Individual Retirement Account. With an IRA, the trustees, not the beneficiaries, decide how the money is dispersed.
• Land Trust. Property management includes the care of land, a house, or other real estate.
• Marital Trust. The death of one spouse provides the funding for this, making it eligible for the unlimited marital deduction.
• Medicaid Trust. Gifting assets to heirs under Medicaid is a way for the grantor to qualify for the program’s long-term care benefits.
• Qualified Personal Residence. A person can lower the gift tax on their primary residence by transferring it from their estate to a qualified personal residence trust.
• Qualified Terminable Interest Property. Property in which a grantor retains the right to make choices after the death of the grantee, but which benefits a surviving spouse.
• Special Needs Trust. Beneficiaries must fall inside a specific need category in order to maintain eligibility for government assistance.
• Spendthrift Trust. Beneficiaries are restricted from selling, spending, or distributing the designated assets without court approval.
• Testamentary Trust. In the event of the grantor’s death, the assets in this fund will be distributed in accordance with the terms of the grantor’s will.

How do you set up a trust?

Individuals can enjoy monetary, tax, and legal security through the use of trust funds, which are considered separate legal entities.

A trust requires a grantor, who creates the trust, a trustee, who oversees the trust and distributes the assets at a later period, and one or more beneficiaries, who receive the assets upon the grantor’s death.

The purpose of a trust is to carry out the donor’s instructions. This means the trustee has lifetime management responsibilities for the estate. Trustee distributions to beneficiaries might take the form of ongoing payments or a single lump amount, depending on the wishes of the grantor.

Establishing a trust necessitates first deciding what the fund’s ultimate goal will be, therefore it’s important to think this through carefully.

Find a way to pay for it, then. Choose a trusted someone to act as your trustee. This person may be able to help you prepare the necessary paperwork and navigate the legal system. The final action is to deposit money into the trust.

Make sure a trust fund is the best option for you, your beneficiary, and your current financial condition before establishing one.

How do private trust companies like Sterling House Trust operate?

Private trust companies (PTCs) are rising in popularity, but not everyone should use one. These trusts can be more flexible for wealthy families, but they can also increase the administrative burden.

More and more individuals and families with significant wealth on a global scale are replicating individual links in the value chain of wealth management services in order to gain independence and management authority.

Trustees appointing PTCs to manage their money is a growing practice, echoing the rise of single-family offices, internal investment managers, and private label funds.

Although having your own private trust firm may seem enticing, there is the added responsibility of managing it. It would be unwise to undervalue the difficulties and responsibilities involved in trust company administration.

There are a number of variables to consider when deciding if a PTC is the best option for you and your loved ones. This article will answer some of those questions and help you evaluate options more thoughtfully.

PTCs do not offer trusteeship to the general public but instead serve as trustee for one or more trusts for an individual, small group, or family.

Typically, they take the form of a corporation governed by a board of directors. Family members, friends, or other trusted advisors can all serve on the board.

Private trust companies allow you and your family to keep watch over the trustee’s actions and guarantee steady management.

It is a potent instrument for bolstering your wealth and estate planning strategy within a system that is, at least to some extent, under family control.

What are the benefits of working with a private trust company?

The benefits of working with a private trust business are numerous. If you run your own trust company, you can alleviate some of the problems plaguing the professional trust market.

As was discussed above, and as is the case with Sterling House Trust, private trust businesses are typically founded so that their clients can exercise discretion and control over their wealth and estate.

Here are some more perks to think about when making your assessment.

Trustee continuity

Execution is just as important as strategy when it comes to estate planning. PTCs allow for the integration of both into a single strategy for protecting a family’s wealth. The most notable advantage is that it eliminates the need to negotiate replacing the trustee.

When a family owns a trust, they have a stake in its management and might develop a deeper relationship with the trustee. If beneficiaries are not happy with a trustee’s decision, this could help avoid a problematic situation.

Consolidation and restructuring in the professional trust industry are having an effect on fees, personnel, and even the location of some trustees.

Professional trustee ownership, which is frequently a deciding factor when selecting a trustee, may change over time because it is driven by private equity funds.

You can avoid worrying about these details by hiring a private trust company to manage your family’s trusts, and the trusts will be administered consistently and reliably for future generations.

Tailored and adaptable support

Choosing a trustee is a serious matter that requires extensive deliberation and input from multiple departments, including legal and compliance. The regulatory burden on trustees has steadily grown over the past few years, necessitating a stringent system of policies and procedures.

Even though they are bound by the settlor’s instructions, professional trustees may miss important details or information. They might go through the lengthy legal process of asking the court for help.

Decisions can be made more quickly and efficiently when handled by a private trust business. Unlike professional trustees, who have to deal with a wide variety of situations, a family trustee can devote their full attention to the trusts it manages for a single family.

As a result, one potential benefit over corporate trustees is greater adaptability. Plus, it involves holding assets that experienced trustees would be hesitant to hold.

Furthermore, the family has a greater say in the trustee’s actions and the trust’s assets.

Risk management

Since trusteeship would still rest with the PTC, you might transfer the PTC’s administration to a professional trustee if circumstances warrant it in the future while still maintaining operational separation.

If your company or organization is vulnerable to catastrophic occurrences like data breaches, reputational disasters, or regulatory concerns, a professional trustee could be thought of as a co-owner of your company or organization and its clients.

With a PTC, you are responsible for your own risk management and only rely on internal factors.

Confidentiality

You have complete authority over who has access to your private data, just as you would in a small family office. The family has the final say in who joins the PTC’s board and administration, and members of the family may be nominated for particular roles.

While it is impossible to prevent every security breach, your company still has fewer employees with access to critical data than the industry average.

What else should you consider before doing business with a private trust company?

Determining whether or not a PTC is the best option for your family’s needs and circumstances requires a careful review process.

Gaining insight into how continuous administration and compliance may be assured and the taxation of the entire structure would be ideal, as would gaining clarification on the unique advantages over a professional trustee.

Whether the costs are reasonable in light of the specific objectives you have set, the nature of the private trust company’s jurisdiction, and the nature of the parties involved.

Fees charged by independent trust companies

It can get pricey to set up PTCs. You will need to establish legal entities like corporations and trusts, appoint directors, and pay them and any administrative help you hire.

Due to the in-depth analysis of your unique circumstances that must precede the development of the framework that meets your needs, the implementation phase can be lengthy.

To a large extent, complexity determines the continuous expense. Given the aforementioned advantages, it is possible that you might be willing to pay more than what a professional trustee would charge.

Private trust company management

Managing a trust firm involves a number of complex tasks. That is why it is important to have experienced individuals serving on the board of directors and, in many circumstances, having a professional trust services provider aid in the management of the PTC.

PTCs are either not subject to any form of oversight by regulators or must be administered by a duly licensed third party in a number of different countries.

Professional service providers are often retained because compliance with the Common Reporting Standard, the underlying sharing of information between countries, and Anti Money Laundering legislation are all major sources of discomfort.

Taxation

While the tax efficiency of the PTC structure itself may not be an issue, the risk that the PTC is managed and controlled by you and your family can be reduced by appropriate design and board of directors appointments.

In addition, the settlor, beneficiaries, and anyone ends up influencing the PTC’s decisions during and beyond the settlor’s lifetime must all consider the tax implications.

Having full discretion over the trust’s management could result in fully taxing your share of the trust’s assets.

Protector

A protector or protector firm can be appointed over a trust managed by a PTC. The trust documents outline the circumstances under which a protector may exercise control and provide guidance to the trustee.

These rights can include the ability to remove and replace the trustee and a veto over distributions, revisions to the trust, and termination of the trust, all of which are designed to safeguard the trust’s beneficiaries and ensure the trust is administered in accordance with its purpose.

For the most part, a guardian should not have the authority of a trustee but should nonetheless maintain oversight. Keeping the aforementioned tax considerations in mind, a family office or protective company owned by the family may be a good fit for such a function.

Legal systems for private trust companies

Liechtenstein and Switzerland have a specialized regulatory environment for PTCs in addition to common law trust countries. Switzerland is actively debating whether or not to adopt local trust legislation, and Liechtenstein has codified trust instruments.

We advise you to think about places where you have access to competent administrative support and where you may already have some familiarity, such as through wealth management.

Compliance with the Common Report Standard and Anti Money Laundering law remains to be addressed, however PTCs in Liechtenstein and Switzerland are excluded from licensing and regulatory monitoring otherwise required to professional trustees.

Private trust ownership

Ultimately, this is goal-dependent. Direct ownership of PTC shares is required if full control is desired.

However, this level of control does not come without costs, as the PTC may not be recognized by the IRS as a separate legal owner of the assets and may be subject to double taxation.

Moreover, from the perspective of asset protection, the trust fund may be easily accessible to potential creditors during legal proceedings.

Because directly held PTC shares could be included in your estate and allow the setup to be liquidated by the following owner, you could also contest the solution on the grounds of long-term estate planning.

Because of these factors, the PTC shares are typically held by a trust or a foundation to ensure long-term success.

PTC shares can typically be held through a trust. PTCs require a special kind of trust called a non-charitable purpose trust. Many legal systems provide for purpose trusts that do not have to last forever.

An enforcer is typically necessary in purpose trusts to ensure that the trust is being administered in accordance with its stated purpose. A reliable individual can step in as trustee so that ownership interests in privately held trust corporations are safeguarded.

The PTC shares may also be held by a charitable organization. To achieve their mission, foundations are legally recognized entities that are managed by a board of trustees.

In order to carry out its mission and manage its affairs, the foundation is represented by the foundation council, which may include family members.

Foundations in Liechtenstein are the gold standard for adaptable and permanent estate planning vehicles. The founding and management of Liechtenstein foundations is simple and has a long history.

If preferred, a Liechtenstein Foundation can take on the role of trustee for the family trusts. Getting rid of the PTC will result in significant cost savings.

As the PTC is not considered a professional service provider and is protected from regulatory oversight so long as services are supplied solely to an insular group of people or the same family, the function of such a foundation is limited by the foundation statutes.

As long as its mission is not for financial gain, the foundation can operate independently of government oversight.

In Liechtenstein, only one member of the foundation council needs to be a licensed professional trustee.

The administrative, service excellence, and efficiency gains that can result from combining a single family office with a PTC are also substantial and can be desirable.

With a single family office, family finances can be centralized, with one point of contact for governance, related services, and risk management.

A unified family is better equipped to hold onto their riches for future generations, and the ability to exert control and provide truly unique and personalised service is enhanced.

What other alternatives are there to private trust companies?

By hiring a professional trustee, you can be assured that your family’s trusts are being managed efficiently and in accordance with all applicable laws and regulations, all at an affordable rate.

Even so, a protector or protector business in which members of your family hold voting stock may be the best way to maintain control over any such trustee.

Liechtenstein foundations

You can appoint extra foundation council members or a guardian to control the professional service provider in a Liechtenstein foundation, making it a credible alternative to trusts.

Single family office

Because of its flexibility and adaptability, single-family offices can be incorporated into existing business structures and used to carry out a wide range of control functions.

Since professional trustees typically limit their obligations and liabilities for investment decisions, this can improve the monitoring and control system, especially with regard to investment management oversight.

Corporate trustees

In addition, the structure of your professional service providers should be consistent with your overall wealth and estate planning approach for optimal, long-term results.

As a result, rather than focusing on each individual option’s merits, the review should instead consider how well the services fit together as a whole. 

Bottom line

When it comes to wealth and estate planning, private trust corporations are potent instruments for both execution and control. However, not everyone is up for the trials and intricacies involved.

An educated choice can only be based on a thorough examination of the specific conditions and needs at hand.

For stable results over generations, the private trust business structure needs to be incorporated into the larger wealth and estate planning framework.

You can avoid solving every problem internally from the get-go by establishing a PTC. Working with an outside firm can help you stay in compliance and manage your private trust company efficiently, while also setting the stage for sustained internal development.

Private trust companies can offer a range of benefits to high net worth individuals, including increased control over their assets and greater flexibility in estate planning.

However, it is crucial for investors to conduct thorough research before investing in any private trust company.

This includes checking the company’s registration and reputation, as well as seeking advice from a licensed financial advisor. By doing so, investors can minimize their risk and ensure that their assets are being managed by a trustworthy and reputable company.

While private trust companies and private bankers can offer valuable services to high net worth individuals, personal wealth managers may provide a more comprehensive approach to managing their clients’ assets.

Personal wealth managers typically offer a range of financial services, including investment management, tax planning, and estate planning. They work closely with their clients to develop a personalized strategy that aligns with their financial goals and risk tolerance.

Additionally, personal wealth managers are often fiduciaries, meaning that they are legally obligated to act in their clients’ best interests. This can provide an extra layer of protection for investors and ensure that their assets are being managed with their best interests in mind.

Overall, personal wealth managers can offer a more holistic approach to managing wealth that may be better suited for some high net worth individuals.

Pained by financial indecision? Want to invest with Adam?

Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.