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

  • BakerHostetler received a 2014 “Best Law Firms” 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.
  • Twelve partners were selected by their peers for inclusion in The Best Lawyers in America© 2014 in various private wealth-related fields.
    Copyright 2013 by Woodward/White, Inc., of Aiken, SC.

Key Contacts

Blog

In The Blogs

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WealthDirector
SEC “Common Trust Fund” Exception Narrowly Construed for Private Trust Companies
April 16, 2014
Recent years have seen a dramatic increase in the number of Private Trust Companies (“PTCs”) established by wealthy families.  PTCs are used to consolidate the trustee function of multiple trusts within a family, and because these trusts...
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WealthDirector
IRS Issues Warnings about Email and Telephone Tax Scams
April 15, 2014
As the 2014 tax filing season progresses the Internal Revenue Service has issued warnings to taxpayers about convincing fraudulent email messages and telephone calls seeking payments or personal information that will enable the scammer to...
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WealthDirector
The Waiting Game: What to Do (and Not Do) While an Exemption Application is Pending
April 9, 2014
So, you have thoughtfully and thoroughly prepared the Form 1023 Application for Recognition of Exemption Under Section 501(c)(3) (“Form 1023” or “application”) on behalf of a charity, and filed it with the IRS along with a completed...
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WealthDirector
U.S.TAX COURT DECISION MAY ALLEVIATE THE 3.8% NET INVESTMENT INCOME TAX BURDEN FOR MANY TRUSTS
March 31, 2014
Because trusts are subject to the 3.8% Net Investment Income Tax at a very low income level, $12,150 for 2014, trustees of trusts owning interests in operating entities have been considering ways to meet the material participation...
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WealthDirector
Will Camp Tax Plan Impact Charitable Giving and Tax-exempt Organizations?
March 26, 2014
In late February 2014, House Ways and Means Committee Chairman Dave Camp (R-MI) released a nearly 1,000 page discussion draft addressing tax reform.  Chairman Camp’s proposal includes changes to numerous sections of the Internal Revenue...
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