Complexity, Collaboration and Candid Communications: A Recipe for the Family Office Dream Team

By Sara Rabi  |  June 23, 2021

I love to engage my clients in meaningful face-to-face conversations. That hasn’t been possible this past year, but more opportunities are emerging, and I am truly looking forward to getting back on the speaking trail. I am a panelist at the Opal Group Family Office & Private Wealth Management Forum in July, where I’ll touch on several evergreen issues that are important for families to get a grasp on. Let me share a little bit of what I’ll be talking about.

The first is dealing with complexity. It may not be possible to simplify that which is inherently complex, but there is a proven method of organizing the legal, accounting and financial advisory aspects of a family office, and it starts with developing, what I call, a dream team of legal, accounting and investment advisors who work together on the client’s behalf. The goal is to create (often the initial job of the attorney) a term sheet that defines roles and responsibilities, outlines key facts like periods of time, establishes guidance for investment management and sets up structures for regular reviews and informed decision making. Ask yourself: could you put your hands on a single document that succinctly presents the most important elements of your family’s legal, accounting and financial position in clear language? If you don’t have a term sheet, perhaps it’s time you did.

Next up is the need for the dream team to work collaboratively with the family office administrators and family members. What works best is a disciplined approach with regular meetings or calls with attorneys, accountants and investment or financial managers together with the family. Set agendas work best and can include portfolio performance review and rebalancing, legal issues involving trusts and estates, and tax issues, especially forward-looking discussions in light of potential new legislation. For instance, there may be legal documents that are now outdated or invalidated due to new legislation or tax rules. Another common problem arises where certain elections are not made on trust, which may end up jeopardizing the S Corporate structure. One last example that I’m paying close attention to are potential changes in 2021 such as the reduction of the $11.7million lifetime exclusion amount and utilizing gifting to Spousal Lifetime Access Trusts (SLAT) to shelter the current lifetime exclusion amount.

Last up is candid communications, and here I really mean educating family members – especially grown children. Simply put, your family can avoid or at least mitigate dysfunction by educating the next generation on the obligations and use of the family’s wealth. The concepts of spending, earning, investing, saving and budgeting money can be taught at young ages, and this financial education becomes critically important as kids reach their teens, and then begin their own careers (possibly within the family business), with their own sets of challenges and opportunities. This is an intensely personal issue families face but education adds clarity and helps avoid misunderstandings. Be brave; pass along to others the information that you know makes your family affairs run well.

We’ll keep this conversation going, and I hope to see many of you live and in person very, very soon!

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About Sara Rabi

Sara Rabi, CPA, TEP, is a Partner at Marks Paneth LLP. She specializes in individual and fiduciary tax preparation and advisory services. She has extensive experience working with estates and trusts. Ms. Rabi is a member of the Society of Trusts and Estates Practitioner (STEP), which is a leading worldwide professional body for practitioners in the fields of trusts, estates and related issues, and is a designated Trusts and Estates Practitioner (TEP). Ms. Rabi serves... READ MORE +


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