A trust company is a corporation authorized to act as trustee for a group or organization. The advantage of a trust company structure is that it allows an entity to legally conduct business for another entity. That entity can be another organization or an individual. Three forms of trust companies exist: state-chartered trust companies, national trust companies, and thrifts limited to trust powers. Practically anyone can establish a trust company, including individuals, financial services firms, broker dealers and insurance firms. Regulatory minimums vary from state to state (the amount required is dependent on the scope of the trust). However, no particular dollar amount is needed.
Items you will need
Corporate tax attorney
Hire a corporate attorney with corporate trust-planning experience as well as a tax adviser. These two professionals can help determine the best structure for your trust company based on your needs and objectives.
Identify the assets to place in the trust company. Assets will depend on the goals and objectives of the company as well as the structure.
Determine how you want the company's assets to be managed. Consider current income needs, risk tolerance and the company's goals.
Identify the individuals or organizations to whom you would like the trust company to make distributions. Also determine the regularity of the distributions.
Select a trustee. The trustee will administer the distribution of assets. If you name an individual instead of another institution, select a successor to the trustee as well. Most trust companies name the board of directors to this role, but consult your attorney to be sure.
Write the trust company agreement. Your attorney will do this for you, but the agreement will be based on the information you provide. It will cover investment philosophy and powers, payment and distribution instructions, any additional roles or responsibilities of the trustee, how the document should be amended or revoked and initial funding. Provide your trustee with a copy of this document.