Is a Family Office Right for You?

Couple talking to a family office employee

While the idea of a family office has been around for quite some time, you might assume it’s a service more appropriate for the Bezos and Buffet families than yours. That was true in earlier years, but more and more families are discovering that a family office can prove useful for households that are merely well-off rather than truly wealthy.

Could a family office benefit your family? It’s more than possible, given the competing demands of time and financial resources today’s families often face. Balancing personal and family needs with the time requirements of keeping up with bills, tracking cash flow and managing charitable giving is difficult under the best of circumstances. Add to that the challenges of managing finances for family members who live outside the household or are elderly, disabled or otherwise unable to handle their own money, and the goal can easily become virtually unreachable.

Modern family office providers frequently offer a number of valuable services that make it easier and less time-consuming to wisely steward the family’s financial resources. Most providers allow clients to select from a list of potential services, tailoring the product to meet individual family profiles and needs. Standard services often include:

  • Bill-pay
  • Financial record-keeping
  • Account reconciliation
  • Budgeting assistance
  • Managing payroll and proper tax documents for household staff
  • Rental property management
  • Charitable giving

For families with more complex needs, services might include:

  • Wealth transfer strategy and implementation
  • Financial education for the next generation as they inherit significant means
  • Coordination of estate and trust planning with attorneys and other professionals
  • Investment advice to manage family assets
  • Development and implementation of a cost-efficient tax strategy in coordination with tax professionals

At any level of support, a family office provides peace of mind and saves time. Clients appreciate the comfort of knowing bills are paid on time, accounts are reconciled and cash flow is being monitored by professionals. In addition, a family office offers better organization that allows increased visibility into expenses for more effective budgeting. With a clear record of income and expenses, families can easily view monthly cash flow reports to track income and analyze spending.

Tracking spending and expenses incurred by elderly parents or disabled family members allows for more accurate financial planning to meet future needs. The enhanced visibility a family office provides can also make it easier to identify financial mismanagement, including fraudulent activity, unwise spending behavior or even emerging issues such as dementia or addiction.

Besides the purely practical benefits, a family office can reduce the potential for conflict within the family around financial concerns. For example, running inter-family loans through the office minimizes the emotional stress and awkwardness that typically arises in face-to-face financial conversations. Issues like overspending or taking advantage of certain family members are limited as well, and, if they do occur, the family office makes it a simple matter to identify and correct without creating fireworks.

Not every family needs a family office, of course. But if yours includes multiple households, domestic staff, significant income and expenses, disabled individuals, college students or a wide variety of other scenarios, a family office might be right for you. Contact the professionals at Halt, Buzas & Powell to learn more about the potential benefits of a family office to help you and your loved ones manage your financial resources more efficiently and effectively.