Should You Have a Family Office?

By Jennifer Ridgely

Daszkal Bolton, LLP

As a high-net-worth individual, you are likely familiar with the term “family office,” however the purpose and benefits of such a specialized office may seem vague. Simply put, a family office is an organization that supports and protects the financial needs and assets of a family. Rather than placing all the trust of a family’s entire assets in the hands of one individual, the family turns to an external expert to serve as a centralized management hub for the day-to-day management of the family’s needs, as well as long-term strategic planning and risk management to sustain the family’s wealth. This creates a level of external controls and safeguards which a single person or family member is not capable of duplicating.

Who Needs a Family Office?

Multi Family Offices (MFO) are best suited toward wealthy families or individuals with a net worth exceeding $15 million. Whereas a Single Family Office (SFO) is reserved for families with a net worth surpassing $250 million, as the costs associated with an SFO can be immense.  However, it is worth noting that there are some families or individuals who could afford a SFO but prefer to utilize a MFO for the cost savings.

Families with the following characteristics would benefit most from a family office:

• A complex estate plan
• Extensive travel schedules and time constraints
• Multiple homes
• Assets highly scrutinized by the IRS, such as airplanes and yachts
• Need for multi-generational wealth succession oversight
• Private Family Foundation
• Need for high-level detailed income and net worth reports.
• Complex income and/or trust tax returns and advisory services
• Need for internal and external controls to ensure security and privacy

Benefits of the Family Office

A family office provides an objective team of professionals who are committed to protecting and furthering the family’s assets and legacy. There is no conflict of interest because the office works directly for the family. The family office brings together all of their trusted advisors to work together as one uniform team for the family.  These professionals consist of accountants, attorneys, investment advisors, bankers, insurance advisors and more.

Additional benefits include:

• Breadth of experience and specialization for high-net-worth individuals
• Broad range of available resources
• Extensive internal controls to protect the safety of the client
• Cost savings of a Multi-Family office compared to a Single Family Office
• Accessibility
• Independence
• Family education
• Daily management of assets with comprehensive financial oversight
• Analytical oversight of bill payments
• Confidentiality
• Customization of services according to family’s objectives
• Neutrality and objectivity
• Synergistic sharing of ideas
• Integration of financial strategies
• Concierge services
• Realization of philanthropic legacies
• Comprehensive reporting

Family Office Structures

All family offices have some variations, no matter if they are a single family office or a multi-family office, and no two offices are exactly alike.  It is important to consider the different services offered when examining, comparing and selecting the family office right for your situation. For example:

• What concierge and professional services do they offer?
• What is the breadth of experience of the staff and how many staff members are available?
• What are the internal controls?
• Who is responsible for your family and how does their personality fit with your family?
• What other resources do they have available to assist your family?
• What are the costs?

Family Office Services

As each family office is structured differently, their services also vary.  Below is a list of different services that a family office can offer:

Premier Family Office Solutions

No two families are the same, and your family office should reflect the values and objectives of your family. If the aspects of your wealth preservation are becoming burdensome, complicated or overwhelming, it may be time for you to consider a family office. Whether it’s providing back-office functions for personal and business needs, or coordinating transactions and communications among your team of advisors, a family office should provide you with good financial health and a greater peace of mind.

Should you find that a Family Office is just what you need, please contact Jennifer Ridgely with Daszkal Bolton, LLP at 561-886-5205 or jridgely@dbfos.com.