Implications of the Increasingly Globally Mobile Family

Cristina Wolff, partner and lead of EisnerAmper’s International Wealth Planning Group within its Personal Wealth Advisory Practice moderated a panel discussion at the 2018 Personal Wealth and Family Office Summit. Joining her were panelists Gerard O’ Beirne, partner and lead of the firm’s International Tax Group and Stephanie Hines, partner in the firm’s Personal Wealth Advisors Group.

Ms. Wolff gave a brief history of the family office structure that traces its roots back to the Crusades, but came into prominence with the Rothschild Family in the 18th century and the Morgan and Rockefeller families in the 19th century.  These pioneering banking families created family offices to manage their immense fortunes.  Notwithstanding the historical perspective, 1/3 of all family offices have been formed in the last 30-40 years as more individuals accumulate wealth.

So, what does this all mean?  It means that family wealth creators want to manage the preservation and growth of their wealth.  However, there are many more concerns than preservation and growth in this increasingly global economy.

Ms. Hines addressed the issue of U.S. domestic “mobility planning” and the need for proper planning to minimize the state tax impact on liquidity events, significant increases in income and family mobility. Ms. Hines discussed the importance for families to be more proactive than reactionary and to understand the landscape of mobility as states take a hard stance to hold on to their taxpayers and tax revenue.  Hence, family offices must recognize the issues and reach out to their trusted advisors as their world becomes more complex.

Mr. O’Beirne discussed the cross-border mobility issues facing wealthy families and individuals that want to have a presence in the United States; addressing the different tests that may result in an individual being a U.S. resident subject to U.S. taxation on their worldwide income.  Mr. O’Beirne also discussed the voluminous reporting requirements for foreign accounts, foreign securities and investment in foreign companies, and the considerable penalties for non-compliance of such reporting.

Ms. Karen Goldberg, principal in Private Wealth Advisors Group and lead of EisnerAmper’s Trust and Estate Practice, also responded to attendee queries (from the audience) regarding mobility issues related to estate and trust issues.  Ms. Goldberg explained the complex and diverse trust taxation issues associated with families on the move.

Ms. Wolff explained that we live in a more transparent world where not only states are sharing information, but countries are doing so as well with the advent of common reporting standards. 

The theme and, thus, the takeaways for wealthy individuals and families that are globally mobile is to plan, plan, plan and to do it proactively; seek the advice of subject matter experts; understand the nuances of not only the tax impact, but the reporting requirements.  All of this while weighing the tax benefits against non-tax issue of uprooting a family.

For more content stemming from EisnerAmper’s 2018 Personal Wealth and Family Office Summit:

• Is Direct Investing Right for Your Family?
• Intergenerational Issues and the Succession of the Family Business: Real Life Stories from Family Members
• Implications of the Increasingly Globally Mobile Family
• Cybersecurity at a Glance