Avoiding problems that often arise with complex ownership structures

The wealthy family often has a myriad of entities and assets to manage. These typically include real estate holdings, trusts and various operating and investing companies, designed through the collaboration of skilled professionals. This complex structure provides the family a level of asset protection and a way to effectuate the transfer of wealth from the senior generation to junior family members.

When these structures are initially created and funded, the overall enterprise reflects the desires and wishes of the family (or at least those of the patriarch and matriarch). However, with the passage of time, transactions occur, distributions are made, assets are sold and replacements are purchased. Without careful consideration, the once-beautiful plan looks more like a tangled spider web. When this occurs, value might be lost and asset protection compromised. To prevent such negative effects, certain best practices should be implemented, particularly related to communications and the flow of funds.

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