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Family Offices: Clients Want Their Own Wealth Team From MEREDITH | PC MEREDITH | PC 4325 Windsor Centre Trail Suite 450 Flower Mound Texas 75028 214-513-1013 Since 2017, the number of single family offices has grown substantially, with 3100 offices in North America. As the economy has surged, the number of families with millions in assets to invest has increased correspondingly. As a trusted advisor, you play an important role in managing the wealth of these families‒and managing the risks associated with the recent downturn triggered by the coronavirus. But even families who are less wealthy can benefit from a team approach to the management of their estate and financial planning. What is a family office? A family office typically provides a variety of services to a very wealthy family, including but not limited to the following: Investment management Cash management Risk management Financial planning Estate planning Tax planning Planning for charitable giving Multi-generational planning Single family offices are typically used by one ultra‒high net worth family having $100 million or more in assets to invest to manage its wealth, and each one is designed to meet the unique needs of the family it serves. Such families are often interested in having the family office serve as their own wealth management business in order to oversee all aspects of their wealth. By starting their own family office, these ultra-high net worth families can retain control of their assets, maintain privacy, pursue the family’s long-term goals, and benefit from the combined wealth of multiple generations, which increases their buying power. Multi‒family offices provide similar services to a limited number of families typically having assets exceeding $20 million, but without as much overhead and responsibility for each family. The multi-family office offers integrated services, which are still customized to meet the needs of each family. The families served receive the benefits associated with a family office but do not have to run it as a separate business. The team approach is best for every family Family offices offer a multi‒faceted approach to wealth management in which attorneys, accountants/CPAs, insurance professionals, and financial advisors all play a role. Although a family office typically has its own staff, unless the family is ultra‒high net worth and able to afford a large staff, it may also utilize third‒party advisors to minimize the costs associated with hiring a large team. Other families, regardless of their wealth, benefit from a team approach as well, as it helps to ensure that all of their estate and financial goals are achieved. A financial advisor helps clients to identify and understand their financial goals and investment objectives. These goals likely include a financial plan that will enable them to have funds sufficient to meet their own needs and maintain the lifestyle they want as well as pass an inheritance on to their loved ones. For high net worth clients, this often includes planning for multigenerational wealth transfers or charitable giving. An estate planning attorney will help your clients with their legal affairs so that people they trust are authorized to make decisions for them if they are too ill to do so themselves and so their money and property are distributed in the way they wish after they pass away. An accountant or CPA provides essential tax planning strategies to your clients, minimizing the taxes that your clients may owe, including the estate tax liability of your wealthier clients (for 2020, the federal gift and estate tax exclusion amount is $11.58 million for individuals and $23.16 million for married couples). An insurance professional provides your clients with an analysis of their current and future insurance needs. Life insurance is a critical part of many estate planning strategies because it can be an important source of liquidity needed to provide for all of your clients' beneficiaries. Insurance is particularly important for clients whose main assets are a business or valuable land or property that is difficult to divide between multiple beneficiaries. Let's Work Together for the Benefit of All Our Clients Whether you are advising very wealthy families who could benefit from a single or multi‒family office or families with more modest means, we can achieve a comprehensive solution for these clients by collaborating to ensure all their financial and estate planning goals are achieved. Please call us to discuss how we can work together for the benefit of our clients. We look forward to working with you. This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies. You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any questions about this or any matters relating to estate planning. 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