17 September 2007

Family offices: What model is right for me?


Patricia Milner

Partner | UK

Family offices come in various forms. The size of the family, its goals and its net worth all contribute to determining which is the most appropriate.

For some families, a stand-alone, bricks-and-mortar office with its own staff may make sense. Such an office can deal with a range of issues, including management of investment portfolios and real estate holdings, tax planning, bill paying and concierge services. It can serve as a contact point for distant branches of a family, making communication among members more efficient. Ideally such an office should be staffed by trusted professionals who can act as advisors, overseeing investments, advising on opportunities and monitoring tax reporting and compliance.  A family office staff can also act as neutral arbiters in case of disputes among family members.

Family office staff should be prepared to make a long-term commitment to the family – and vice versa. Loyalty and trust are paramount. In such an office, the staff is completely dedicated to the family’s needs, and privacy is guarded closely.

Because of the expense involved, a single-family office may only make sense for families with a net worth of $500,000,000 or more.

For some families, it can make sense to join a multi-family office, in which a number of families with similar goals and values join together to take advantage of the economies of scale that their combined resources can bring to management of investments and procurement of services.

There are still other families that seek the privacy and focus of a family office but might not wish to make the big commitment to the kinds of overheads involved in running an office and paying staff. For them, one option might be a virtual family office, in which a team of experienced professionals manages the functions of a family office, providing the infrastructure and the expertise, keeping records, and serving as quarterback of the family’s advisory team on a range of legal and fiduciary issues. 

How can we help?

Regardless of the type of family office, our attorneys assist families to:

  • determine whether a family office would meet their needs – and if so, what kind of office would best serve its interests.
  • design the necessary legal, fiduciary and investment holding structures for a family office, or restructure afamily office that is already in place.
  • provide comprehensive and integrated tax and estate planning advice in connection with business ventures, investments, works of art and other unique holdings, philanthropic endeavors and real estate.
  • help with governance and succession planning, ensuring that the goals and values of the family continue through the generations.

While many firms offer tax advice and estate planning services, we are an nternational firm well-organized to meet the needs of family offices. We have extensive experience with family offices in the U.S., the U.K. and throughout the world. We understand that each aspect of a family’s business affects all the others. With our experience in working with advisors in a variety of fields and our multi-generational focus, we can help each family office to come up with a structure that is both workable and durable over many generations.

Category: Article