Advisors and Family Office Members Work Best While Working Together

By Pamela A. Mosiello  |  June 21, 2021

The benefits of a well-run family office are myriad and well-known: efficiencies of scale, directness of purpose, and goal-oriented strategies, to name a few. From my perspective as an advisor within a multi-family office, what works best is when family members and administrators are in tune with each other, and with their outside advisors, through consistent communication.

Here are some examples: The conversations I have with my clients around such issues as timely tax filings, especially in light of the unknown ramifications of tax code changes that might take place as the Biden tax proposals wend their way through negotiation in the House and Senate. Specifically of course, I’m referring to potential changes in long-term capital gains tax rates for taxpayers with adjusted gross income of over $1 million.  Here, I think is one of the best ways in which the multi-family office benefits from candid communication with tax advisors.  What we try to bring to this conversation is a consolidated picture of a family’s taxable income, gains and losses by classes that allows us to forecast the effect of potential changes to long-term capital gains rates well ahead of time.  With this advantage, we can formulate plans that help mitigate the impact of the taxes through strategies like tax-loss harvesting, selling and rebalancing portfolio positions, and other solutions we can suggest – often in conjunction with the family’s investment advisors. This leads to clarity in decision-making, which is of such value to our family office clients.

Another example where the value of consistent communication shines through is when we advise families with regard to their obligations in communicating with regulatory agencies, such as the IRS. Various issues with tax filings can be avoided simply through thorough preparation and timely filings. Understanding the broad scope of assets that are subject to these disclosures is a critical part of what I do for my family clients, as they can range from investment holdings, to personal and corporate bank accounts, to certain equity positions. The basic purpose of communications with the IRS is disclosure, whether, for instance, through Foreign Bank Account Reporting (FBAR), or the filing of Form 5471, information return of US persons with respect to certain foreign corporations, or Form 8621, information return by a shareholder of a passive foreign investment company or qualified electing fund. It is my responsibility, as a member of a team of family office specialists and tax team professionals, to collect information, facilitate timely filings, all while consistently communicating with our clients.

I hope you are experiencing the values and benefits of working together as a team with your advisors. You should never be shy about initiating discussions with your team of advisors, and you should expect them to be proactively engaged with you on a regular basis. As change is constant, diligence is mandatory, and communications is the key.

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About Pamela A. Mosiello

Pamela A. Mosiello, CPA, MSA is a Tax Partner with 20 years of experience in public accounting.  Ms. Mosiello specializes in individual tax planning and compliance, trusts and estates, and high-net-worth individuals. She also advises clients with complex investment structures and tax reporting requirements, including those with financial assets held in foreign trusts, institutions and other entities. Ms. Mosiello is intimately familiar with tax strategies and foreign reporting requirements related to U.S. citizens working and... READ MORE +

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