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FAMILY OFFICE

The purpose of a Family Office is to manage and oversee the wealth management affairs of highly affluent individuals and their families in regard to such issues as tax, wealth transfer, investment management, governance, estate planning, risk management, compliance, education, communication, financial education, and so on.

The Family Office can also collaborate with the family's professional team members - lawyers, accountants, tax advisors, family business advisors, among others - to derive the family's strategic plan and decide when to move forward and execute on certain goals. Another critical function of the Family Office is to discern a multitude of risks that are often interconnected and interrelated among individuals, their assets, and their entities.

3 KEY ROLES OF THE FAMILY OFFICE

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THE KEEPER & THE EXECUTER

The Family Office for many families is the primary keeper and executer of transactions and legal documents. Thus the family office may have to manage and oversee a variety of different tasks and transactions such as:

  • Liquidity of family units and various entities.

  • Process of transaction approval.

  • Impact a transaction may have on legal structures.

  • Impact a transaction may have on tax expense or savings.

  • Administrative tasks to be completed once the transaction is complete.

  • Housing and archiving relevant legal, compliance, estate planning, business planning, and/or tax documents.

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THE GUARDIAN & CONFIDANT

Perhaps the Family Office's most important role is to protect the family it serve and as such recasting the role of the Family Office as Risk Manager. It is therefore important that a Family Office is proactive and forward thinking to foresee potential dangers prior to having them occur. The most critical risks include:

LACK OF SHARED VISION FOR THE FUTURE

When a family does not have a shared vision of the future it becomes increasingly more challenging to keep the family together particularly under the confines of a family office structure.

LACK OF EFFECTIVE DECISION MAKING PROCESS

When a family lacks a governance process, building continuity, buy-in, and commitment can fractionalise the family group.

LACK OF TRANSPARENT FAMILY COMMUNICATIONS

Communication is perhaps the most important component to continuity planning of wealth for multi-generational families. Whether a family member is intentionally or inadvertently isolated from receiving communication or does not receive the depth of necessary information to make an informed decision, both scenarios put the family at tremendous risk.

IMPROPER OWNERSHIP STRUCTURE

How assets are structured, titled, and held are foundational to how a family's wealth management objectives are achieved. If improperly structured, a series of problems such as tax, legal, and compliance issues can arise.

LACK OF APPROPRIATE DIVERSIFICATION OF ASSETS

Concentration of a particular asset, such as a family business, or a type of investment, such as real estate, is often cited as the source of great wealth. However, concentration or lack of diversification can have even more severe downside risks associated with them, and diversification is often cited as a means to preserve wealth.

Thus, members of the Family Office may also act as sounding boards and trusted confidants of the family as they navigate a whole host of issues. As confidant, they provide objective, unbiased advise that helps develop and empower the family members enhancing their oversight of the family's legacy.

The role of confidant or consigliore is perhaps one of the most critical functions of the Family Office. In many respects it is akin to have a second set of eyes that can always see what you are seeing and help to validate or clarify the course at hand.

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THE BRAIN TEST

Lastly, a Family Office can be a repository and a thinking partner to foster ideas and help launch family members into new careers, passions, and interests. Inspiring and fostering a collaborative dialogue between the family and the Family Office on "what could be".

FAMILY OFFICE SERVICES

Family Legacies offers our family business and high net worth clients the following Family Office services:

Strategic Wealth Management

  • Identify Financial Resources and Objectives

  • Develop Intergenerational Wealth Transfer Plans

  • Coordinate with Professional Advisors

  • Facilitate Information Flow

Investment Planning

  • Provide Personal Attention

  • Monitor Investment Performance

  • Provide Comprehensive Performance Reporting

  • Participate in Investment Manager Selection

 

Trusts and Estate Service

  • Provide Estate Planning Recommendations

  • Develop Family Wealth Plans

  • Support Trustees in Fiduciary Duties

 

Family Legacy and Leadership

  • Support Strategic Long-Term Family Vision

  • Actively Guide, Promote, and Support Governance

 

Philanthropic Giving

  • Support Family Philanthropic Mission

  • Develop Personal Gifting Programs

  • Administer Family Foundations