Wealthy families are able to manage their money, investments, and shares in businesses. You might wonder, "Oh, what do wealthy people do?" Wealth requires care.
Family members must look after their legal and financial obligations, plan for inheritances, create an operating structure for the family's business, and establish regular communication between family members.
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If members live in different places or countries, it can be difficult to coordinate. To ensure that the family business runs smoothly, it is important to have a clear communication channel between members. Family offices can be established to handle all of these matters.
A family office can be considered a single-in-all advisor for families. The office will offer financial advice and guidance to families. Sometimes, family offices can be divided into three categories (A-C), depending on the level and nature of the service they provide.
Traditional family offices, which act as a separate private company and assume responsibility for all aspects of the family's estate, on a daily basis, would be classified under Class A. These offices act as a single-stop shop for all matters and are paid on a retainer.
They are independent and have no relationships with any financial service provider. Family members, who have the ability and time to manage their estates, but need help with financial matters, can use a Class B service. This is usually offered by a financial sector or legal firm.
These can be made available to family members if they have financial products that they are affiliated with. A Class C service is also available for families who are looking for on-site management services and estate planning, but not financial guidance or advice.