The Essence of a Single-Family Office

Author—Glen Chee

All family disputes are unpleasant and usually acrimonious, especially when significant wealth is involved, the accompanying litigation risk is high. Family wealth planning is frequently undertaken against a background of positive planning, often when the second generation is younger, and the family small and without complications. After the first-generation wealth builders have passed on, trust structures and family offices holding on to very large assets risk becoming the focus of family disputes and litigation.

In light of the impetus of ultra-high net worth individuals and families establishing family offices in Singapore, we have to gently remind ourselves (and the family) in our capacities as trustees, and family office advisors the purposes of setting up family offices and funds is not only for tax exemptions under section 13O and 13U or merely for obtaining a residence pass.

We should also consider the softer elements, as well as helping families to minimise disputes, history is littered with grand old wealthy families whose wealth has dissipated in spite of having family offices, wealth planning structures in place but the Rockefeller Family Office after 140 years exists and continue to grow, the Rockefeller family has an estimated net worth of USD$8 to 9 billion is a good example of a highly successful Family Office surviving the vastitudes of time. Several very important factors helped preserved the Rockefeller Family Office to transfer the family wealth to the 6th and the 7th generation, other than wealth the patriarch John Rockefeller imbedded the family ethos into the entire structure, the emphasis of family unity & harmony, family belonging & ownership, value of money and philanthropy contributed to the survival of the Rockefeller Family Office.

New age family offices founded by Asian technology giants such as Shanda Family Office (founded by Chen Tianqiao and Chrissy Luo) though still in an early stage, the founders have a clear vision and embedded into their family office key ethos "make money, support innovation and change the world" through philanthropy funding on the area of brain science, artificial intelligence and disruptive technology.

Other than technical and legal skills, professional advisors must also consider soft skills such as the psychological aspects to understand families and their relationships to their businesses or to their wealth. Equally important is the families' dynamics, understanding the potential conflict and trigger points among the family members, especially in a large family, as such create a more holistic governance system through family councils, family charters and conflict resolution.

Making wealth for generations is paramount but equally important is family unity and harmony, acrimonious legal disputes will dissipate funds, take resources away from investment strategies and may break the family apart causing the demise of any well intended family office created by the first generation for preserving wealth to the next generation.

About the author
Glen Chee

Futu Trustee (Singapore) Legal Counsel, Head of Compliance and Legal

Glen for more than a decade held the position of Group Head of Legal and Compliance in various international Trustee and financial services firms. In addition, he joined the Singapore subsidiary (compliance division) of a top tier UK law firm listed under the London Stock Exchange. He advises and specialises in regulatory solutions for the Trust and fiduciaries institutions, payment services institutions and private clients. He read law through the University of London international law programmes and obtained the grade of second upper honors division, LLB (Hons)(Lond) and was top student in his Singapore cohort. His post graduate diploma for compliance was awarded by Manchester University and International Compliance Association. In 2021, he was certified as a personal data protection practitioner after completing the practitioner course at Singapore Management University.

The information of this article is for reference only and is not intended to provide any legal, tax or other advice, nor should it be considered for such purposes. Clients are recommended to seek professional advice.
The content of this article is based on reliable sources at the time of making it and it is subject to revision by our company without notice.

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