Username  Password   Forget your password? | Contact Us
Current Cover

Theories of relativity

In the just-published March/April issue of Family Business Magazine, attorney Joe Goodman explains that because of today's demographic and medical realities -- divorce and remarriage, increased longevity, unmarried and gay couples raising children, in vitro fertilization and gestational surrogacy -- estate planning is more complicated than it used to be.

In my March/April "From the Editor" column, I note that these new realities also complicate the question of who should be considered part of "the family," and thus who is permitted to own or inherit stock in the family business. A panel of family enterprise stakeholders will discuss this topic at our forthcoming Transitions East 2012 conference, which will be held in Orlando, Fla., April 25-27.

Each family must determine its own stock ownership policies by considering the family values and how family units might be formed in the future. It is instructive, however, to consider how others have answered those questions.

With the enactment of the Family Office Rule, which Congress inserted into the Investment Advisers Act of 1940 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the U.S. Securities and Exchange Commission has considered this question, as well. The Family Office Rule determines whether a family office must register as an investment adviser with the SEC. Family offices that provide investment advice to people not considered as family clients must register.

On a "Frequently Asked Questions" page on the SEC's website, staff of the SEC's Division of Investment Management tell us who they consider to be "family members," for the purpose of determining compliance with the Family Office Rule:

• Same-sex domestic partners and unmarried opposite-sex partners are considered family members. (Presumably, so are lawfully married spouses.)
• However, "in-laws related through the spouse of the common ancestor, or through spouses or spousal equivalents" do not qualify as family members.
• Spouses or descendants of a stepchild whose parent later divorced the family member stepparent are not considered family members under the rule.

Whether or not you agree with the U.S. government on these matters (or if you find the SEC's wording to be so confusing that you don't know whether you agree!), these definitions are a way of opening a discussion on this topic with your family members.



Commenting is not available in this weblog entry.

Get the RSS Feed

Recent Posts

New trend: The succession bonus

An April Fool’s joke to play on your family

Hardly working, or working hard?

Why America needs family-owned newspapers

Where are the women directors?

Home sweet home

The forest vs. the trees

The value of values education

The gift of stewardship

Include your in-laws

Monthly Archives

April 2014

March 2014

February 2014

January 2014

December 2013

November 2013

October 2013

September 2013

August 2013

July 2013

June 2013

May 2013

April 2013

March 2013

February 2013

January 2013

December 2012

November 2012

October 2012

September 2012

August 2012

July 2012

June 2012

May 2012

April 2012

March 2012

February 2012

January 2012

December 2011

November 2011

October 2011

September 2011

August 2011

July 2011

June 2011

May 2011

April 2011

March 2011

February 2011

January 2011

December 2010

November 2010

October 2010

September 2010

August 2010

July 2010

June 2010

May 2010

April 2010

March 2010

February 2010

January 2010

December 2009

November 2009

October 2009

September 2009

August 2009

Complete Archives

Family Business Publishing Company • 1845 Walnut Street • Suite 900 • Philadelphia, PA 19103 • (800) 637-4464