Family Office and Private Trust Companies

 
Family Office Representation

Family Offices are an important conduit between family members and BakerHostetler’s Private Wealth lawyers. We understand that one of the principal functions of a Family Office is to promote efficiencies with outside service providers, and we believe this is best achieved through a collaborative effort. For example, a Family Office may be better suited to carry out certain necessary functions such as financial analysis, tax return preparation, insurance monitoring, and other administrative matters, all of which provide an important foundation for legal counsel to provide creative and effective advice. Our Private Wealth lawyers also serve as the gateway to the full array of legal specialties BakerHostetler brings to bear. Understanding the role of a Family Office has allowed us to maintain meaningful and longstanding relationships with the managers of our Family Office clients.

We often help our clients set up the proper structure and ownership of their Family Offices. Clients rely on our securities law experience to work within the new “Family Office” exception under the federal Investment Advisers Act. Likewise, for those families who manage their own investments through partnerships or limited liability companies, we advise on how to comply with the many facets of the Investment Company Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934. We have also worked with Family Offices to develop template estate planning documents tailored specifically to a family’s unique values, and traditions. This not only creates long-term efficiencies, but it also provides a platform for unified family estate planning principles which can be applied throughout many generations, regardless of family geography.

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Private Trust Companies

In recent years, many families have formed their own Private Trust Company (PTC) to install a permanent, family-controlled entity as Trustee of family trusts. A PTC can be structured as a stand-alone entity, or it can be incorporated into the structure of a Family Office. We advise clients on choosing the most favorable state of formation, assist in developing creative ownership structures that meet family objectives, and provide ongoing counsel regarding the operation of a PTC.

We have been a thought-leader in the PTC area for decades. Our Private Wealth lawyers formed one of the first PTCs in the State of Wyoming many years ago and we have obtained several private letter rulings from the IRS regarding the income, estate, and generation-skipping tax consequences of forming a PTC. We also obtained a cutting-edge ruling just prior to the IRS moratorium on issuing further IRS rulings.

We work with local counsel in several states, including Wyoming, Nevada, South Dakota, Delaware, and others, to provide efficient representation of PTCs in those states. Our understanding of the PTC laws in different states allows for sophisticated trust planning, often resulting in a change to the state situs of trusts for the purpose of increased administrative flexibility.

Family Office/Private Trust Company Team

Due to the unique issues involved with Family Offices and PTCs, and our firm’s longstanding work in this area, we have a team of lawyers who provide these specific services. Our Family Office/PTC team includes not only Private Wealth attorneys, but also experienced attorneys in securities law, corporate law, and partnership taxation.

Recognition

  • “Best Law Firms” 2014: National Tier 1 Ranking in the area of Trusts & Estates Law from U.S. News – Best Lawyers®.
    • Regional Tier 1 rankings were earned in Trusts & Estates Law in Cleveland, Colorado, Columbus and Washington, DC.
  • The Best Lawyers in America© 2014: Twelve partners were selected by their peers for inclusion in various private wealth-related fields.

Key Contacts

Blog

In The Blogs

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WealthDirector
Retirement Planning Strategies under the Scrutiny of the Federal Fisc
August 26, 2015
President Obama’s proposed budget for 2016 shows that some retirement planning strategies have drawn the attention of the Federal government and may be subject to future legislative limitations. The President’s proposed budget suggests...
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WealthDirector
IRS Plans to Further Restrict Family Business Valuation Discounts
August 21, 2015
IRS regulations anticipated for release as early as this September may further restrict valuation discounts. The exact scope of the regulations is unknown, but the regulations will likely make it more difficult for taxpayers to discount...
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WealthDirector
The Ohio Supreme Court Places Limitations on the Ohio Bright Line Income Tax Residency Presumption
August 4, 2015
On July 8, 2015, the Ohio Supreme Court found that Ohio nonresidents may not claim the benefit of the Ohio “bright line” presumption of nonresidency for income tax purposes if the taxpayer attests to having a domicile outside Ohio on the...
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WealthDirector
Trusts Find Shelter from State Taxes in State Courts
July 31, 2015
In two recent cases, taxpayers have successfully challenged state taxation of trust income on the basis that the taxing states had a minimal connection to the trust. In The Kimberly Rice Kaestner 1992 Family Trust v. North Carolina Dept...
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WealthDirector
Bitcoin and the Like: Further Tax Developments to Monitor
May 13, 2015
Virtual currency developments continue to emerge, including state tax guidance, a court decision on deductibility of losses, and the Uniform Fiduciary Access to Digital Assets Act (the “Act”). State Tax Guidance The New Jersey Division of...
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