A question we often hear is ‘what is a family office’? And how does it differ from a family business?
Separate to a family business (which is a family-owned business covering all sectors), a family office supports the family itself: generally providing services tailored to the needs and objectives of the family for which it is established.
This includes managing the family’s private wealth and affairs, philanthropy and educating the younger generations.
Is my family eligible for a family office?
While any family can think about these same issues and investment goals, our Family Office Start-Up allows families with a minimum of $2 million to invest to start a family office.
A good test is to ask your family – immediate, extended and intergenerational – if they are interested in:
- Protecting family assets, wealth and creating a legacy;
- Intergenerational transfer of wealth;
- Separating the family business and family wealth; and
- Formalising a family structure and governance.
While some families may have had this nest egg to invest outside of any businesses they own or operate for some time, others may also consider a family office when they have inherited significant wealth, or just sold a business or an investment that has returned significant wealth.
What could my family office focus on?
The focus and priorities of a family office is unique to each family. We work with your family to transform your ideas into a long-term vision for your family.
We are currently in unchartered waters and there is uncertainty around what this year will bring. We are seeing a real desire for family businesses looking to diversify. This involves a strategy to extract excess cash from your business in a tax-effective manner so the family can diversify their interests and set up a family office.
The initial goal may be vague, but what we often hear families talk about is the aim to help the next generation get into the property market. We work with families to turn this high level goal into a reality. We can assist in formulating a tax strategy for you to extract funds. You can create an entity that acts as a family bank – that is, uses the family wealth to on-lend to the next generation to buy property. The loan can be repaid interest and principal to ensure you provide financial education and responsibility to the next generation. Our team acts like a concierge for your family and interacts with you and your solicitor. This ensures loan agreements are formulated and the family’s assets are protected from any potential relationship break ups or legal claims down the track.
Working with clients
Grant Thornton is excited to announce our Family Office Start-Up package. Our Family Office Start-Up supports families in a simple five step approach to create a holistic approach to managing your family wealth, as well as the intergenerational transfer of wealth.
We cover: aligning the family’s purpose, developing optimised tax structuring and strategies to withdraw cash from the business, building investment strategies, and implementing the plan end to end. Our aim is to simplify the process. This allows families to have easier access to a team supporting you to set up a structure and education platform focused on building your family wealth.
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