CASE STUDY
From Underwhelmed to Hooked
A New York private equity investor contacted Pacific Trust Company needing a professional trustee for three existing trusts. Two are irrevocable trusts with $175m invested in commercial real estate, private equity, hedge funds, marketable securities and ranch lands. The other trust is a life insurance trust holding multiple policies on the grantor’s life.
Why They Approached Pacific Trust Company
The prior trustee was an individual who was a colleague of the grantor. This person fell ill and the grantor decided it was time to move trustee responsibilities to a company with the expertise and capability to handle the complexity of his portfolio for generations.
“For a long time, I’ve been looking for a trust company that I could trust. ‘Underwhelmed’ is the nicest word I can come up with for bank trust departments. I chose Pacific Trust because the quality of people is superb, and the service is high touch.
They took a large number of diverse, complicated financial arrangements and appropriately insisted we put some order around the assets. From my experience working with other trust departments, they could have never figured out the complexity of my family’s trust assets let alone administer them effectively the way that PTC has done.” - Grantor
What We Did
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Updated the trust structure: We converted two of the trusts to be directed trusts. PTC now serves as the directed trustee focusing on administration, distributions, and beneficiary relations. The Grantor serves as the investment manager of the trusts.
“Pacific Trust not wanting to manage the investments or sell me investment products, was a big differentiator for me. By focusing on the trust administration, they don’t have a conflict of interest.” - Grantor
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Implemented strategic holding companies: These new companies sat underneath the trusts to better organize and protect the asset groups and optimize the partnership relationships for the long term. We advised on the structure, reviewed the holding company agreements, created asset lists and holding structure diagrams, created investment policy statements, and facilitated the restructure.
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Changed the situs of two trusts: The situs of two of the trusts were in New York. We changed them to Washington State where there are more favorable trust laws. We continue to administer multiple transactions each week for these trusts as the grantor continues to make active investments.
“My wife and I do not come from wealth. I’ve worked my whole life to get what I’ve got for myself and my family and I want good people to help me take care of it. It’s all about the people and the quality. I am hooked on these asset lists.” - Grantor
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Family education: Annually, we host a family meeting with the entire family to educate the next generation on the family’s investments and give the family a formal opportunity to connect on business matters. We also meet with each beneficiary quarterly to ensure we are building a strong relationship with the whole family.
The family meeting Pacific Trust hosted for me, my wife and children, really drove home to my whole family how good of a choice Pacific Trust is for us.”
GRANTOR