Risk Mitigation for Family Offices: Structuring Solutions for Luxury Assets
A family office, much like a corporate service provider, is dedicated to managing the wealth of ultra high net worth (UHNW) individuals and families in alignment with their vision and values. Beyond wealth preservation and business investments, family offices also oversee various aspects of the owner's and their family's lifestyle, including personal concierge services and luxury asset management. Correct structuring is essential to mitigate liabilities and ensure compliance with international regulations.
Why Structure Luxury Asset Ownership?
To protect and segregate the liability of an owner's other broader personal wealth and assets, it is advisable to establish separate corporate structures when owning valuable luxury assets, especially those linked with employment and high value movable assets. This approach helps:
- Segregate liability from the owner's personal wealth
- Ensure legal compliance with tax and regulatory requirements
- Facilitate succession planning and smooth intergenerational wealth transfer
While some family offices manage these assets through their own companies, professional tax advice and other considerations often leads to the use of offshore structures such as companies, partnerships, foundations, or trusts. These structures not only offer tax efficiencies but also serve as robust legal and financial safeguards.
Navigating Risks in Offshore Structuring
Despite the advantages, offshore structuring presents complexities that family offices must carefully navigate, including:
- Regulatory and Compliance Challenges: International reporting requirements, such as the Common Reporting Standard (CRS) and Economic Substance Regulations, demand constant monitoring
- Legal Ownership vs. Beneficial Ownership: Proper structuring ensures a clear separation, reducing exposure to legal risks
- Privacy and Security Considerations: Public disclosure of ownership can invite unwanted media scrutiny and security concerns
Without the right expertise, family offices risk financial penalties, reputational damage, and potential legal disputes. Partnering with experienced professionals mitigates these risks while ensuring assets are managed efficiently.
How Equiom Supports Family Offices
Equiom acts as an extension of a family office, collaborating to enhance the luxury asset portfolio and mitigate ownership risks. With an experienced team, they expertly guide and support family office clients in acquiring and managing luxury assets such as superyachts and private aircraft.
- Establish secure ownership structures for high-value assets
- Navigate complex tax and regulatory landscapes across jurisdictions
- Maintain compliance with evolving international regulations
- Safeguard privacy and security through strategic asset structuring
With extensive experience in managing superyachts, private aircraft, fine art collections, and other luxury assets, Equiom ensures seamless administration and risk mitigation, allowing family offices to focus on broader wealth management strategies.
Family offices face increasing complexity in managing luxury assets, but with the right structuring solutions, risks can be effectively mitigated. Contact Callum Carine (CallumCarine@equiomgroup.com) to learn more on how our bespoke solutions can enhance your family office strategy and provide peace of mind in luxury asset ownership.
