Miami is a hot bed for start-up businesses and entrepreneurs, and is one of the most innovative business communities in the country
. It’s certainly no surprise, seeing as Florida is ranked the #2 state to do business in
, due to its favorable tax environments and quality of life. Where Miami offers all the trappings of a cosmopolitan lifestyle and year-round warm weather, many entrepreneurs have built successful businesses locally, and many others have moved to Miami after building wealth in other states or countries. During the entrepreneur’s lifetime, he or she generally keeps a firm grip on management of family assets. However, planning for management of these assets on the death or disability of entrepreneurs poses unique challenges for their families and advisors.
Upon the death or disability of an entrepreneur, the management of the family’s wealth (often spread across three or more generations and including interests in closely-held businesses, real estate and more liquid investments held individually and in trust) can be a daunting undertaking. Often a sophisticated family member or advisor steps up to manage the wealth with the help of accountants, lawyers, consultants, investment advisors and others. This is at best a temporary solution, however, and one that is not always available. For many families, a trust company may step in and take the laboring oar. In some situations, however, the family may to wish to coordinate closely among different branches of the family or to retain assets (such as agricultural properties, family owned businesses or private equity investments) a traditional trust company would prefer not to manage. In those circumstances, the family should consider utilizing a family trust company.
A family trust company is a custom made solution for families whose circumstances are too complicated for an individual and whose assets are unsuited for public trust company trustees. As its name implies, a family trust company is an entity owned by family members which serves in a fiduciary role for the family (but not members of the general public). A family trust company may serve as trustee and provide investment advisory, wealth management and administrative services for a family. The family trust company can foster a high level of responsiveness and flexibility, and may allow continued family involvement in asset management. The family trust company may also encourage family unity by providing a platform for consolidation of investments and family office management. Entrepreneurs who hope to provide a lasting legacy for their descendants may find the family trust company to be an essential part of their long term planning.