Family Office

We have counseled wealthy families in the creation and operation of family offices for many years. Our clients include family offices that have accumulated wealth over many generations as well as relatively new entrants.

Investment managers have been a significant portion of our clientele for decades, and many of our family office clients are existing or former asset managers or real estate professionals whose net worth ranges up to several billion dollars.

We provide a comprehensive suite of legal services for family offices including:

  • organization and structuring
  • estate, gift and income tax planning
  • business succession and continuity planning
  • private equity and venture capital investments
  • asset protection
  • regulatory and compliance advice and filings
  • real estate transactions and leases
  • employment, confidentiality and non-compete agreements
  • service and supplier agreements negotiation

Organization and Structure

The structure that is best for a particular family office, including the need for separate investment vehicles, depends on a number of factors. We provide clients with a comprehensive analysis of these issues, including:

  • the types of investments the office plans to make (e.g., will any investments have special tax or liability issues attached, such as real estate)
  • the frequency with which the family office intends to trade
  • the types of “clients” the family office will have (e.g., will any of the clients be IRAs, charitable trusts or private foundations; will any be non-U.S. persons)

We then form the necessary entities and draft operating and partnership agreements and investment advisory and services agreements memorializing the relationships. We also advise the family as to which employees are permitted to invest in the investment vehicles consistent with the family office exemptions under the securities laws.

Investments

We advise family offices on a range of investment activities, including hedge and private equity fund investments, co-investments and direct investments. We have advised family offices with respect to traditional asset class investments, such as real estate and venture capital, as well as emerging alternative asset strategies, such as art, professional sports teams and private credit. We have extensive experience in planning for many different types of assets, held in the U.S. and abroad, including:

  • Investment management firms
  • Closely-held businesses
  • Real estate
  • Art collections
  • Life insurance
  • Illiquid investments

Securities Law Compliance

We address a variety of securities law and compliance issues that arise in running a family office, including:

  • Compliance with the family office exemption under the securities laws
  • Preparation and filing of required securities law filings
  • Analysis of securities trading issues such as insider trading

Trusts & Estates Planning and Administration; Estate, Gift and Income Tax Planning

Our practice draws on the firm’s trusts and estates and tax experience to help our family office clients achieve their intergenerational wealth planning goals, minimize income taxes and support their philanthropic endeavors.

Our advice goes beyond the standard estate planning vehicles that utilize family partnerships and trusts to embrace sophisticated estate planning techniques. We create preferred partnerships to help families shift wealth and income taxes among multiple family members in different generations. We help foreign families and U.S. families with foreign connections to invest tax efficiently in the U.S. through a combination of domestic and foreign trusts and business entities. We help design tax-efficient funding mechanisms for life insurance using either third-party premium financing or intra-family financing through private split dollar arrangements.

We also minimize income tax burdens through a variety of strategies. By structuring investments through private placement life insurance. For example, our clients can invest in alternative investments and create a stream of income that is free or deferred of income tax. Our clients restructure trusts and isolate certain trust assets that are designed to eliminate state and local income taxes on the trust income. We also help clients structure their compensation and other expenses in a tax-efficient manner.

We provide a full range of estate and trust planning services to family offices, including probate of wills, filing gift, estate and fiduciary income tax returns, fiduciary accounting services, and coordinating the collection of assets, payment of expenses and the orderly transition of estate and trust terminations.

We also represent family office clients in disputes arising from estate and trust matters, including probate contests, contested accounting proceedings, fiduciary removal proceedings and asset turnover proceedings.

Charitable Planning and Philanthropy

We represent a wide range of tax-exempt entities, including national and international public charities, private foundations, arts and cultural organizations, and social clubs. Our practice covers the broad range of legal issues of concern to charities and non-profit organizations, such as:

  • The formation, ongoing administration, grant making (both domestic and international) and dissolution of non-profits
  • The development of charitable planning vehicles, including charitable remainder trusts, charitable lead trusts, public charities, private foundations and donor-advised funds, to maximize a client’s charitable goals
  • The qualification and ongoing compliance of public charities and private foundations

Real Estate

Kleinberg Kaplan provides comprehensive legal services to family offices that invest in real estate and real estate-related assets, including ownership structuring, formation, development, acquisition, financing, joint ventures and leasing of commercial, office, retail, industrial and mixed-use projects. We also analyze prospective real estate investments and guide our family office clients through the implementation of a successful exit strategy for their investment positions.

Additionally, we assist family offices with their space planning needs, including leases, brokerage agreements, architect agreements and construction contracts.

Succession Planning

We work to increase and preserve the franchise value of our clients’ companies through comprehensive succession and continuity planning. This planning provides confidence that the firm will survive the departure of its founders and aligns interests with the family objectives.

Our work stands out in the industry for engaging with succession issues long before the founder considers leaving the firm. An initial component of such plans is the creation of management and risk committees so that senior employees can participate in the governance of the firm.

We structure equity grants to potential successors. Our experience extends to developing a succession plan with sufficient flexibility for the firm/founders to adapt to changes in the market and changes in the respective capabilities of employees; providing advice regarding how much equity and control should be granted to the successors and retained by the founders or family; determining if additional restrictive covenants should be imposed upon the successors; developing buy-out terms if a successors departs prior to the retirement of the founders; and establishing mechanisms to protect the return on the founders’ equity after departure.

Featured Professional

ERIC S. WAGNER

PARTNER

Eric Wagner is the chair of Kleinberg Kaplan’s Corporate Department. Eric advises both start-up and seasoned private investment funds, SEC registered investment advisors, family offices,…

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