Trust governance at scale: why ultra-wealthy families are turning to PTCs
A case that reignited debate on trust control and governance
A recent New York Supreme Court ruling in C.S. v. R.H. has reignited discussion among wealth-management and legal professionals over how trust assets are treated in high-net-worth divorces. While the case turns on the specifics of divorce law, its underlying question, how much control is too much when managing wealth through trusts, goes to the heart of modern governance. For advisers serving ultra-wealthy families, that issue now extends far beyond matrimonial disputes and into the wider architecture of how family wealth is organised and supervised.
In this landmark case, the husband had transferred more than $180 million in marital wealth into irrevocable family trusts that owned the couple’s homes and investments, yet he retained considerable control as investment adviser and trustee-remover.
The court found that, despite the formal structures, his control and the trusts’ role in supporting the couple’s lifestyle effectively made those assets part of the marital economic enterprise, allowing them to be included in the equitable-distribution analysis.
Andrea Solana, Partner and Head of Advanced Planning at MASECO Private Wealth leads the commentary. “It has been common US estate planning for many years to fund irrevocable trusts that are considered completed gifts for gift and estate tax purposes but have the grantor still retain an element of control over the trust assets in order to allow the trusts to be considered an “intentionally defective grantor trust”. It allows the assets to be taxed more favourably at personal income tax rates during the grantors lifetime and can be structured to allow the grantor to still retain some benefit of income during lifetime as well.”
“This case highlights the important difference between irrevocable trusts and intentionally defective grantor trusts where a gift has been made for estate tax purposes but where income tax liability remains to the individual and assets may still be accessed for marital benefit. Going forward it will seemingly become more important in divorce cases for individuals to have a clear separation of powers and be able to avoid the express use of funds to help support the marital lifestyle if they don’t want the assets to be considered as part of proceedings.”
When control undermines protection: lessons from C.S. v. R.H.
Estimated reading time: 11 minutes
Joshua S. Rubenstein, global chair of private wealth at Katten Muchin Rosenman LLP, New York, observes: “As a general presumption, irrevocable trusts are not normally treated as marital property in the United States. Trusts can be created prior to marriage or during marriage, and by third parties or by either or both spouses. Premarital and third-party trusts are almost never an issue in divorce. Trusts created from marital property during marriage by the spouses can also be safe from divorce, but they are subject to a facts-and-circumstances test. The result in C.S. v. R.H. is in no way surprising and should cause no concern to the planning industry. The facts in that case were egregious and demonstrated de facto control over and benefit from the trusts’ assets by the husband, notwithstanding that the origin of the creation of the trusts’ assets was estate planning.”
Antonia Barker, family partner at Hamblin Family Law, London, adds: “This husband’s actions in seeking to resettle the family’s wealth in new trusts in the hope of removing them from the dispositive power of the court are a particularly blatant example of the sort of misconduct which the courts, both in New York and here in England, simply will not tolerate.”
She continues: “The New York Supreme Court demonstrates here that, just like the courts of England and Wales, it will not allow parties to misuse legitimate trust structures to deprive their spouse of their fair financial entitlement, to share in wealth created during the marriage, and in no small part due to the valuable contribution of the homemaking spouse to family life.”
Global parallels: how courts in England and the U.S. view trust control
Peter Burgess, senior partner at Burgess Mee, notes: “The position as a matter of English law is very similar. The English courts have long had the power to vary ‘nuptial’ settlements, settlements with a connection to the marriage. ‘Settlement’ has historically had a broad definition as well, encompassing life policies, pensions and arrangements for occupation of a house. However, alongside this rarely used power, the approach where the settlement is not nuptial is to consider whether it is a ‘resource’ available to one party. The question set out in the seminal case of Charman is whether, if asked, the trustees would advance some or all the income or capital to the beneficiary spouse.”
He adds: “There is a long line of cases where the use of trust funds to finance a lifestyle has meant that the court has inferred the trust assets are a resource and therefore counted in the assets potentially available for distribution, or, more likely, retention by the beneficiary spouse and offset by an uneven distribution of non-trust monies in favour of the non-beneficiary spouse. In other words, there is no need to prove the trust is nuptial if it has been used as a piggy bank during the marriage.”
“Following the Supreme Court decision in Standish and the changes to how matrimonialisation is viewed, it will be interesting to see whether non-matrimonial assets within a trust are still effectively treated as part of the pot or whether the Standish decision brings these resource arguments to an end because the source of the money is now more important than its use during the marriage.”
Beyond the courtroom, similar questions around structure, control and accountability now influence how families organise intergenerational wealth and governance.
Discipline, not disruption: the enduring value of good governance
For most practitioners, the lesson from these cases is one of discipline rather than alarm. Courts continue to uphold well-structured trusts where genuine independence and transparent governance exist. The same emphasis on credibility and control, rather than legal novelty, is quietly reshaping how ultra-wealthy families manage their global assets.
The ruling serves as a reminder that legal form alone does not guarantee protection, governance and control remain decisive. That principle is driving a wider shift in the wealth-planning world, where families of significant means are refining how they hold and manage assets, increasingly through private trust companies (PTCs).
Across regions, from Asia to Europe
Across regions, from Asia to Europe, these governance themes are influencing how families structure and oversee their wealth. In Hong Kong and Singapore, for example, regulators are promoting PTC regimes alongside family-office initiatives, reflecting a rising interest among Asian business families in long-term governance and continuity.
Marilyn See, director of business development at Trident Trust Singapore, says: “We have seen a rich vein of demand for trust services in the same period, in large part triggered by the surge in family offices.”
That surge is increasingly translating into demand for more formal trustee structures such as PTCs.
The rise of private trust companies (PTCs)
Against this backdrop, advisers agree with this growing interest in and use of private trust companies as ultra-wealthy families seek more tailored governance and control structures. PTCs are family-owned entities, often established in jurisdictions such as Jersey, the Cayman Islands or the British Virgin Islands. They provide a governance and legal framework designed for managing a diverse range of assets and frequently operate alongside or within a family office.
Matthew Howson, counsel in private wealth at Harneys London, specialising in BVI and Cayman trust law, notes rising demand for PTC solutions, particularly in the United States, as asset values and complexity increase.
While comprehensive data is limited, Chip Martin, president of IQ-EQ USA, describes PTCs as “emerging as among the most popular global vehicles for family-office structuring.”
Why ultra-wealthy families are turning to PTCs
When properly established, says Markus Schwingshackl, founder of Centro Law in Switzerland, “The range of advantages includes enhanced control over trustee decisions, continuity of governance, ability to integrate philanthropic, commercial and investment vehicles under one shareholding or board structure, strong privacy, and alignment of trustee decision-making with family values and long-term planning.”
On the other hand, a U.S. adviser at Fiduciary Trust International cautions: “PTCs typically entail higher up-front and ongoing costs, greater administrative and regulatory burden, including corporate governance, board oversight and succession planning for the PTC itself, and may not always be cost-efficient if the asset base or complexity does not justify the overhead.” In practice, a PTC can serve as the trustee hub within a family-office structure. Yet if that office covers lifestyle, investment, tax and philanthropic services, the additional cost and governance requirements of a PTC can make it more expensive, and sometimes less efficient, than using a third-party trustee or hybrid model. Several advisers note that some families find the administrative overhead “more expensive and troublesome than desired.”
The cost of control: who PTCs really suit
Andrew Horbury, founder and chief executive of the Cavenwell Group in Dubai and Jersey, gives typical cost parameters: “$10,000-$50,000 including incorporation and legal fees and ongoing costs of $20,000-$100,000+ per year, depending on complexity.”
According to UBS’s Family Office Quarterly Report, Judy Spalthoff, head of family-office solutions, New York, and John Mathews, head of private wealth management, Americas, suggest that families with assets exceeding US $500 million are the best candidates for establishing a PTC.
Do you really need $500m to justify a PTC?
Peter Moorhouse, Managing Director, ACE International, Switzerland adds a contrary view. “We are often asked by families considering a single- or multi-family office: “What level of assets do we need to set up a family office?” The same question arises with private trust companies (PTCs). The honest answer is: it depends.”
“A PTC is a company created to act as trustee of a family’s trust or trusts, usually with the support of a professional trustee. It combines external professional management and guidance with meaningful family input. Unlike large institutional trust companies that serve many clients, a family PTC is closed: it exists solely to serve the interests of one family.”
“PTCs are often associated with families worth $100 million or more, but families with less wealth can still benefit – particularly where enhanced privacy, family governance and control, complex or diversified assets, or long-term succession planning are key priorities.”
“We administer and manage a number of PTCs, some with significantly less than $100m in assets. The appropriate infrastructure, corporate governance and controls depend on the family’s circumstances, the nature of the assets and the professionals involved. These factors drive the cost of running a PTC and therefore influence the level of assets at which it becomes worthwhile.”
“It is vital that families receive clear advice on governance, control and objectives before establishing a PTC. Jurisdiction choice is also critical: different regimes carry different licensing and regulatory burdens, which need to be assessed holistically with the family and their advisers.”
Shareholding structure for-profit and not-for-profit philanthropic activity
Geoff Cook, managing director of Geoff Cook Advisory in Jersey, adds: “PTCs have been popular for some time and are the go-to vehicle for family offices. As wealth and asset prices have adjusted in the U.S. in particular, their use has multiplied. They provide a governance and legal structure for managing a diverse range of assets and are often located in places like Jersey, Channel Islands, with sound rule of law, access to expert service providers and a degree of asset protection. They often have companies underpinning them as the shareholding structure is a helpful way to reflect different activities, for example, for-profit and not-for-profit philanthropic activity.”
A converging lesson: control, cost and credibility
While C.S. v. R.H. renewed attention on how courts interpret trust control, advisers largely view it as a contained development rather than a shift in practice. The rise of PTCs, by contrast, reflects a broader transformation in private wealth management, driven less by legal caution and more by scale and sophistication.
PTCs are now a hallmark of families managing vast, multi-jurisdictional assets, offering a centralised governance framework and tailored oversight of investment and philanthropic activity. Yet they remain firmly the preserve of the ultra-wealthy, often costing more to operate than a conventional family office and usually justified only where asset values exceed half a billion dollars.
Both the case and the trend point to the same conclusion, wealth structures are becoming more intricate, but the defining factors remain constant, cost, control and credibility.
Joshua S. Rubenstein’s Citywealth Leaders List profile
Katten Muchin Rosenman’s Citywealth Leaders List profile
Hamblin Family Law’s Citywealth Leaders List profile
Peter Burgess’ Citywealth Leaders List profile
Burgess Mee’s Citywealth Leaders List profile
Andrew Horbury’s Citywealth Leaders List profile
Cavenwell Group’s Citywealth Leaders List profile
UBS’ Citywealth Leaders List profile
Geoff Cook’s Citywealth Leaders List profile
Geoff Cook Advisory’s Citywealth Leaders List profile
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Key Takeaways
- The recent New York Supreme Court case C.S. v. R.H. highlights trust control issues in high-net-worth divorces.
- Despite traditional views, the ruling reinforces that trusts can be treated as marital property under certain circumstances.
- Private Trust Companies (PTCs) are gaining popularity among ultra-wealthy families for tailored governance and control over assets.
- While PTCs offer advantages like enhanced privacy and continuity, they can involve significant costs and regulatory burdens.
- Many advisers suggest families worth over $500 million are ideal candidates for establishing a PTC, but those with lesser assets can also benefit.
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