Trust Companies fall into two categories.
The first is an ordinary company which has the power granted to it by its Memorandum of Association or its Constitution (if it is an International Company) to act as a trustee. If it acts as a trustee of one trust and charges nothing for doing so, it does not need any government license. A special type of trust company is one which is commonly known as a Nominee Company. It holds assets in its name but has no equitable interest in those assets. The assets are held for third parties pursuant to a Declaration of Trust, also known as a Nominee Declaration. If no charge is made for the service, then no license is required.
The second category is a licensed Trust Company. A licensed Trust Company is specifically set up to act as trustee for many trusts and is licensed to apply for grants of probate in respect of deceased estates. It acts in a professional capacity and charges for its services. It will have experienced trust officers in its employ who administer estates and living (inter-vivos) trusts such as family trusts set up to shelter family assets and administer the transfer and beneficial interests in those assets. A licensed Trust Company will also provide nominee services on a chargeable basis.
Trusts themselves fall into two broad categories.
The most common for estate and financial planning purposes is the inter-vivos, or living trust. They are created by a settler (generally the client) by transferring assets to a trustee under a contract (Trust Deed) that sets out the responsibility of the trustee in respect of those assets and any further assets that may in the future be settled on the trust. This is a private contract and does not create a separate legal entity. The life of the trust is given to it by the trustee, who represents the trust in all matters.
The second category is the trust created by will. Often upon the death of someone, his/her will bequeaths some assets to people who are not of full legal capacity. The most common is to children who are not yet of legal age. In other cases it may be for the benefit of people of diminished legal capacity (those who are not able to look after themselves). In such cases the bequeathed assets are left to a trustee to administer those assets for the benefit of the named beneficiaries.
It is a common mistake that people say they want to create a trust company when in fact they desire to create a trust that has a trustee to be responsible for certain assets.
PITCO is a licensed Trust Company that professionally acts as a trustee and nominee. It also will assist interested parties to create and license a new trust company for the client if required.