Antonio Gastélum
Dually licensed in Mexico and Texas, Antonio helps clients with international estate and business planning.

family office

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Single Family Offices were once solely a perk utilized by billionaires like the Rockefellers and Rothschilds, but this arrangement continues to grow in popularity. Over the past 20 years, the massive growth in global wealth has resulted in the creation of an estimated 12,000 to 15,000 family offices around the world. If you're finding it difficult to oversee your family's wealth and day-to-day operational needs, a family office might be the solution you've been searching for.

Benefits of a Family Office

As your family's wealth grows, your needs become more complex. This is especially true if you're dividing your time between Mexico or Latin America and the United States or the rest of the world. If it's created properly, a Single Family Office can make it easier to manage your assets, enhance communication between generations of family members, and ensure that your interests are aligned with one common end goal. A family office can also help you:

  • Preserve your privacy
  • Benefit from the collective buying power of the family's combined assets
  • Support your needs after the sale of a family business or another significant liquidity event

In its simplest form, a Single Family Office is a privately held company employing a staff that provides dedicated personal and/or professional services to one family. It's likely that you're already working with a wide range of individuals to manage your needs, but a family office brings all of these advisors under one roof. Lawyers, CPAs, real estate brokers, travel agents, and life coaches are just a few of the many highly skilled individuals you may want to include in your Single Family Office.

The smallest family offices may only have two or three full-time employees, but large family offices can easily employ several hundred people. The arrangement should be customized to fit your family's needs and the level of service you desire. If your needs are not substantial enough or do not require exclusivity, you can become part of a Multifamily Office, but that is a topic for another occasion.

Key Components of the Family Office

Most Single Family Offices offer three main categories of services: wealth management, legacy management, and lifestyle management.

  • Wealth management. Wealth management services are a critical component of any family office arrangement. This includes investment strategy and oversight, as well as tax planning and compliance. Document management and recordkeeping is also a standard component of most arrangements. For Mexican and Latin American investors, wealth management services must be provided by professionals who understand the different rules that affect non-residents doing business in the United States. For example, the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) requires that foreign investors pay U.S. federal income tax on the sale or disposition of their U.S. real property interests in a way that is similar to the obligations imposed on U.S. citizens. Additionally, as we explain in our whitepaper, Is it a Matter of FATCA or CRS? What Every Investor With Foreign Accounts Needs to Know, the Foreign Account Tax Compliance Act (FATCA) and the Common Standard on Reporting and Due Diligence for Financial Account Information (CRS) have ramifications for asset management as well as privacy, safety, and security.
  • Legacy management. Your family office can help you leave a lasting legacy for your loved ones by managing family trusts and LLCs owned by trusts taking steps to minimize gift and estate taxes, and preparing the next generation to assume their role in the family business or to actively participate in managing family-owned assets. Request a copy of our guide, 5 Ways Your International Estate Plan Can Be Pulverized by a Lawyer With No International Experience, to learn why any estate planning professionals involved in your family office must have experience meeting the unique needs of international clients.
  • Lifestyle management. This is where the family office has the most flexibility. The office may perform a range of concierge services, including making travel plans, supporting relocation efforts of a given family member, maintaining social calendars, and hiring household or personal security staff. In most cases, the Single Family Office is even charged with managing the family-owned yachts and aircraft.

Communication Is Essential

A recent survey of professionals involved in creating family office arrangements found that 65% believed resistance to a change in habits was the biggest obstacle to overcome in creating a Single Family Office. If your family members are used to operating independently, centralized oversight and administration will require an adjustment period. Clear expectations and the ability to customize services to meet individual needs will help ease the transition.

Let's Get Started

If you think a Single Family Office might be the right solution to managing your family's affairs, our dually licensed international business planning attorneys can guide you through the process of establishing this arrangement. Contact us to get started.