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An Insider’s Perspective on Traditional Family Offices

An Insider’s Perspective on Traditional Family Offices

In our last post, we described the basics of what a “Family Office” is.  In this post, we’ll go over in more detail the traditional family offices: what they are, how they serve families, and their unique pros and cons.

 

To review traditional family offices, an embedded family office (“EFO”) is the term used for a family that uses their operating business staff to assist in managing their personal affairs.  A single family office (“SFO”) is a dedicated team of professionals, separate from the operating business, that work exclusively for a single family. (more…)

November 15, 2016 0

What is a “Family Office” – an insider’s perspective

What is a “Family Office” – an insider’s perspective

You have probably heard the term “Family Office” recently.  Having personally worked in several family offices, at a dinner party or networking event, 9 times out of 10, after the “what do you do?” question, my response would get a raised eye brow, a curious look and a “what the heck is that?”.  Some initially thought I worked in the social services field.  It’s always been interesting trying to truncate the answer into a 30-second snippet so as not to bore my conversation companion (and I’ve failed on the self-imposed 30-second time limit many a time).  This series will definitely take longer than that, and (hopefully) give you clearer understanding of what a family office is, how they work, and if appropriate, how they can help you or a family you know. (more…)

October 18, 2016 0

The Estate Freeze Part 4 – Transferring your business to family members

The Estate Freeze Part 4 – Transferring your business to family members

This is our last article in our estate freeze series.  The first talked about the purpose of a freeze, the outcome, and some of the considerations.  The second and third articles overviewed some of the mechanics.  This fourth and last article discusses some of the soft issues that need to be addressed as part of the overall planning, such as family communication and expectations.  In our experience, it is often the soft issues that get little attention. (more…)

September 20, 2016 0

Where the Rubber Meets the Road

Where the Rubber Meets the Road

In our last post, we discussed the various types of shares and their ownership as part of our series on the mechanics of an Estate Freeze.  You got the Opco Preferred shares at a frozen and fixed value of $10M and the Opco Voting shares for control.  But, we stopped short on discussing who gets the Opco Equity shares.  Remember, the Opco Equity shares are designed to benefit from any increase in Opco’s fair market value over and above the $10M freeze value.

In this third post of our series on estate freezes, we will discuss who should own the Opco Equity shares and how they should be held, directly or one step removed.

(more…)

August 9, 2016 0

Its summer – would a freeze cool things down?

Last month we posted our first instalment on the pros and cons of an estate freeze.  In particular, we discussed:

  • The purpose and outcome of a freeze;
  • How rich do you need to be to consider a freeze; and
  • When you should freeze.

In this post, we will drill down into some of the mechanics of a freeze of your Opco shares, while at the same time trying to keep the lingo as simple as possible.  Before you delve into this post, make sure you read part one.

(more…)

July 14, 2016 0

The Estate Freeze

CrossonVoyer Freeze

Over our collective careers, we have advised on numerous estate freezes to the extent we could almost template the transaction.  But that would be wrong because there are so many issues and concerns that go into a freeze, such as what the new shares should look like, standard trust terms, etc. (those, and other questions, will be answered later in this series).

With that in mind, the purpose of this blog series is to:

  • Outline the purpose and outcome of a freeze,
  • Identify a number of issues in determining if a freeze is appropriate for you,
  • Once the decision is made to proceed, what the mechanics are to put the freeze in place, and
  • What you should do “post freeze”.

So, let’s get started.

(more…)

June 14, 2016 0

Is a family meeting a good idea? Part 3 of 4

Welcome back – feedback from the first family meeting was overwhelming!  After a successful off-site meeting, the family decided to continue with a similar theme for the next meeting.

To keep things progressing, Sam met with Steve (our Senior Advisor) to work through a list of questions and suggestions for the upcoming family meeting.  Together they agreed that the goals of the next family meeting will be two-fold:

  • Understanding how Sam’s children fit into SamCo, either as a family member, employee and/or shareholder – the soft stuff; and
  • Bringing in an outside speaker, Sam’s banker, to talk about financial planning – the hard stuff.

 

(more…)

April 26, 2016 0

Is a family meeting a good idea? Part 1 of 4

The other day we got a call from Sam (owner of SamCo, a wholesaler of electrical supplies) asking about family meetings – something he read about in a succession planning article.  He mentioned that his three kids were getting to the age where they were asking questions about the business.  Sam’s thinking was that that they should understand SamCo’s business and how they fit in.  Sam wanted to get our thoughts on the idea and how to go about doing it.  Read on… (more…)

March 16, 2016 0

Matrimonial agreements within a shareholder agreement

Recently, we were working with a group of tax and estate advisors executing an estate freeze of an Opco, together with the creation of a Family Trust (the “Trust”) to hold new Opco shares.  When considering the terms of the Shareholders Agreement, the question was raised:

In addition to asking direct Opco shareholders, what if we asked the beneficiaries, trustee and protector of the Trust to sign a prenuptial, marriage or cohabitation agreement?

Imagine the reactions.  Read on… (more…)

February 22, 2016 0

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