Simplifying Tax Preparation for High-Net Worth Families

You and your family have worked hard to achieve a level of wealth that bestows equal parts freedom and responsibility. And while writing that yearly check to the IRS is probably not an activity you look forward to, it’s a responsibility that comes with the territory.

Come April 15, it’s likely that your accountant and other representatives have dedicated many, many hours to determining exactly what you owe to Uncle Sam. You may have children and grandchildren who are beneficiaries of the family’s wealth. You or your spouse may have obligations to a prior marriage. You may have multiple businesses and residences, perhaps in more than one country. You probably give to multiple charities. All of these factors (and there are likely others) must be taken into account when preparing your annual tax return.

So many are depending on you, from employees to charitable foundations to family members themselves. It’s critical that your taxes are handled by experienced professionals who are abreast of the latest state, federal, and international laws so as to accurately determine your tax burden and avoid issues that could arise during a future audit. In order to ensure that your taxes and other financial obligations are handled accurately and efficiently, it’s wise to utilize the resources of multiple professionals who are very familiar with your business and other interests—and that’s where the services of a family office can be invaluable.

Tax Complexities

A successful family business is ripe for creating seemingly endless complexities where paying taxes is concerned. The following are just some of the considerations that must be taken into account, most often by your various legal and financial advisors who may not always be able to communicate as seamlessly as you might hope.

Multi-State and Foreign Assets

If you run a business that is operated across multiple states, or internationally, the tax ramifications become increasingly complex. A business with multiple locations requires accounting professionals and lawyers with expertise in compliance across the country and possibly across the world in order to minimize and properly determine tax burden.

Estate taxes

A proactive approach that considers the activities of multiple generations is necessary to minimize loss of assets to the estate tax, which otherwise could jeopardize up to 40 percent of the estate, even requiring liquidation of assets to pay the bill. A comprehensive plan may include smart gifting strategies, implementation of a variety of trusts, consideration of titling and assets, and the ownership and control structure of any businesses involved. It is wise to review estate plans on an annual basis.


You and your family members undoubtedly have philanthropic interests to which you may devote time and money. There are multiple tax vehicles available to you to make the most of your charitable giving. These, of course, can become even more complex when your family’s philanthropic ventures are distributed among a variety of beneficiaries.


High net worth individuals are audited at a rate of seven times the average tax payer. If and when you are audited, it goes without saying that good record keeping and fastidious adherence to all applicable laws will make an audit go as quickly and smoothly as possible.

Can a Family Office Help?

The short answer is yes, a family office can be invaluable in assisting high net worth individuals and families in minimizing their tax burden, especially in cases where the interests of complex, multi-location businesses intersect with multiple real estate holdings and perhaps varied charitable interests of family members.

A family office is a group comprised of legal, financial, and tax professionals who collaborate to manage the various affairs of high net worth individuals and families. On the low end of service, a family office may be empowered to handle bills and payroll, coordinate household staff, plan vacations, and manage a residence while a family is traveling. On the high end, a family office may provide guidance on issues such as structuring family trusts and assisting with estate planning. Input on investing, charitable giving, trusteeship, lifestyle management, foundation management, and more may fall under the oversight of a family office, depending on your needs.

Why Use a Family Office Instead of a Random Group of Providers?

There are significant advantages to using a family office instead of amassing a team of individual service providers. The value of working with a team with a broad spectrum of expertise and ability cannot be underestimated when it comes to accurately preparing your taxes as well as organizing many other facets of your family’s life. A family office becomes familiar with all aspects of your finances and goals for the long term, and has the ability to closely coordinate in order to best assist you in bringing your wishes to fruition.

Coordinated service providers who have an incentive as a group to maximize the expenditure of your resources will be on the lookout for opportunities that a single provider with a narrower focus might never consider or even be aware of.

Complex decisions, such as estate planning or passing control of a family business from one generation to the next, involve the inputs of a range of professionals and require consideration of legal, tax, and financial management issues. Bringing the knowledge and expertise of multiple legal and financial experts under one umbrella has economies of scale, potentially saving you a considerable amount in fees while providing a coordinated team that can advise you best.

It’s worth mentioning that a family office will not necessarily render outside counselors unnecessary. While a long-term, trusted lawyer or accountant is unlikely to be able to offer the depth and breadth of a family office, they can liaise with the team, moving into more of a management or oversight role.

How to Choose a Family Office

Above all, you employ a family office to represent and execute your family’s financial affairs according to your wishes. Because your family office will have a great deal of access to your personal financial details, you must be comfortable with the team that will be acting on your behalf, just as you would with any lawyer or accountant. Be sure to interview all of the principles of the firm to ensure that you are confident with each one on both a personal and a professional level.

Another consideration is the annual cost of a family office. Family offices may charge for their services in a range of ways. Depending on the level of service you require as well as your level of personal wealth, a family office can assess fees on an hourly basis, on a flat-fee basis, or as a percentage of assets. Make sure to work with the family office to determine the best and most cost-effective fee structure. You may also wish to confer with your current advisors (with the understanding that they may have a vested interest in steering you away from using a family office) to help determine the right fee model for your particular circumstance.

Use the following questions as a guide when interviewing principals at the family office:
  • Do you offer all of the services I need?
  • What are the qualifications of your service providers?
  • Will you provide written acknowledgment that your financial advisors act as fiduciaries?
  • Do the firm and its employees have clean compliance records?
  • Will I receive periodic reports detailing the firm’s activities on my behalf?
  • Are you willing to work with my current counsellors when necessary?

FBO Services—Unparalleled Trust

Your time is at a premium, and the last thing you want is for the important details of organizing household staff, keeping current with payroll, and organizing legal documents to take up valuable time or for obligations to fall through the cracks. As your family office, FBO Services will efficiently manage your day-to-day financial matters as well as helping you with more complex planning depending on your needs.

When FBO Services becomes your family office, you truly become a part of our family. We work with you and any outside providers you may have to develop a strategy that is constantly considering and evaluating your best interests and advising you on how best to preserve and grow your wealth. We advise and assist in the formation of trusts, partnerships, corporations, non-profits, and foundations to protect your family’s present and future. Our multi-faceted team can handle tax services for even the most complex situations you may face.

President and founder Joe Roskos has taxation and accounting experience that spans decades. For more than twenty years, he headed Joseph W. Roskos & Co., the successor to the Pew Family Business Office, which was later sold to the Bryn Mawr Bank Corporation. The members of Joe’s highly educated and experienced team come from diverse professional backgrounds and collaborate diligently to support you and your family’s busy professional and personal lives.

Accurate and smart tax preparation is too important to be regarded as an afterthought. The financial and legal professionals of FBO Services consider and employ every conceivable strategy to lessen your tax burden, often finding exponentially more savings than the services of a simple accounting firm. Contact FBO Services today to discuss your family’s needs and find out how we may be able to greatly simplify your administrative activities while providing stress-free, first-rate tax preparation.