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

  • BTI Client Service 30: BakerHostetler advanced 19 positions to #9 (2016)
  • “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
Proposed Regulations Under IRC Section 2704 Seek to Eliminate Discounts on Transfers of Family Business Interests
September 23, 2016
On Aug. 2, 2016, the Treasury Department and the Internal Revenue Service released proposed regulations under Internal Revenue Code (Code) section 2704 (the “Proposed Regulations”). The Proposed Regulations, if finalized in their proposed...
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WealthDirector
The Donor Advised Fund Alternative to a Family Foundation
August 31, 2016
There are several gifting vehicles that provide donors and their families with the opportunity to participate in their philanthropy on an ongoing basis. Frequently, families will consider creating and funding a private family foundation...
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WealthDirector
IRS Simplifies Rules for Correcting Failed Rollover
August 25, 2016
On August 24, 2016 the IRS published Revenue Procedure 2016-47, which simplifies the steps for correcting a missed rollover from a qualified plan or IRA to another qualified plan or IRA. Amounts distributed from a qualified plan or IRA...
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WealthDirector
What do Prince, Michael Jackson, and Whitney Houston Have in Common?
July 12, 2016
Michael Jackson, Prince and Whitney Houston each revolutionized the music industry and impacted popular music for decades. We all appreciate how Michael Jackson moonwalked across the stage, Prince made it (purple) rain and Whitney Houston...
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WealthDirector
Governor Kasich Signs House Bill 229 to Create Ohio Family Trust Company Act
June 16, 2016
On June 14, 2016, Governor Kasich signed House Bill 229 into law. The bill, which was over two years in the making, allows an Ohio family to establish its own trust company to serve as trustee for its family trusts. The legislation...
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