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- Contributed by MontereyTrust.com

Generally speaking, a Family Office is a business run by and for a single family. Normally, this family would be of ultra high-net-worth and would be involved in various business ventures, investments and include multi generational planning through the use of trusts, and incorporate various legal entities. The goal is to centralize the management of the significant family fortune.

The Family Office usually consists of a team of cross-discipline professionals such as a CPA, an Attorney, an Investment Professional, a Real Estate Professional and other Professionals as needed for the Family’s specific business ventures. It may include an international team of professionals who work with investments on behalf of the Family worldwide. All the professionals work as a team to centralize the management of the multi-faceted Family business to maximize return on investments, reduce overall risk exposure, and procure the “best in class” of managers, services and products. The team oversees the investments, taxes, philanthropic giving, trusts and legal matters of the Family. The team also assists in the effective transfer of wealth across generations and prepares younger generations for the task of overseeing the Family fortune when it comes time.

In addition to addressing the “professional” needs of the Family as mentioned above, the Family Office team may offer direction or oversight on the Family’s more personal needs such as household staff, travel planning, and day-to-day banking services, payroll and management of the Family’s personal legal affairs.

The first Family Offices in the United States were formed in the late 19th and early 20th century for families with names such as Rockefeller, Carnegie, and Pitcarn. Family Offices were initially used by Families with $500 million in assets or more although recently the term “Family Office” has been used to refer to financial services for “less” wealthy Families - with just $100 million or so. In some cases, a Family Office is assembled with professionals such as Bankers, CPAs, Trustees, Attorneys, Investment Professionals who will take on several Families as clients.

The benefits of having a team of professionals oversee all aspects of a Family’s wealth and work together include the ability to hire and fire the “best of breed” in all investments. For instance, if the Investment Professional on the team determines that an asset allocation for the equity investments of the Family funds should include 20% to domestic equities, the Investment Professional can seek out and retain the services of the absolute best domestic equity manager in the US. That manager is hired to manage that segment of the portfolio only. If that domestic equity manager begins to lag the market, he or she can be fired and a new manager for the 20% in domestic equities can be hired. The same for a tax advisor or real estate manger. The Family Office gives the Family the ability to procure the best in all arenas. The Family Office team is dedicated solely to the Family and not to a brokerage house, bank or other “employer” so their allegiance is with what is in the best interest of the Family.

Overall, the Family Office can provide all the needed services for the high-net-worth family.








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