Family Office Counsel for Operators and Investors
We structure holding companies, buy-sell agreements, and governance for families whose wealth still sits inside an operating business.
A family office sits at the intersection of three sets of rules that were never designed to work together: the securities rules that govern who may advise the family, the tax rules that govern how wealth moves between generations, and the corporate rules that govern the operating business still generating most of the cash. Family office counsel is the discipline of making those three regimes agree with each other before a liquidity event, a death, or a sibling dispute forces the question. Most families in this position do not need a bank. They need a structure that survives the founder.
Family Office Fundamentals and Valuations
The family office category has grown faster than the professional services built to support it. Deloitte counts roughly 8,030 single family offices worldwide as of 2024, a 31 percent increase over the 6,130 counted in 2019, with the number projected to approach 10,720 by 2030. Below the headline figures, the American reality is more modest and more common: a founder, one operating company producing most of the cash, a real estate entity holding the buildings, a passive investment sleeve, and a CPA. For those families, the valuation question is not a portfolio question. It is an operating-business question, and it drives everything downstream.
- The typical structure below the billion-dollar tier is one operating company, a separate real estate entity, a passive investment account, and no written governance document
- Estimated single-family-office assets under management sit near $3.1 trillion today and are projected to approach $5.4 trillion by 2030
- Valuing the family’s largest asset is a normalized-EBITDA exercise, complete with owner compensation add-backs, related-party rent, and customer concentration adjustments
- Discounts for lack of control and lack of marketability remain the most contested numbers in any family transfer, and they hold up only when the governing documents actually impose the restrictions being claimed
- The federal estate and gift tax exemption is $15 million per individual for 2026, or $30 million for a married couple, indexed for inflation beginning after 2026 under the IRS inflation adjustments for tax year 2026
- Families holding regulated operating assets carry a second valuation variable most appraisers miss: whether the license transfers at all
The families that get this right treat the operating company as the estate plan rather than as one more asset the estate plan happens to hold.
Legal Structures for Family Office Holdings
Entity architecture is where family office counsel earns most of its keep, because almost every problem that surfaces at a closing traces back to a structure that was assembled one entity at a time without a plan. A holding company sitting above operating subsidiaries isolates operating liability, simplifies a future partial sale, and gives the family a single place to set policy. The management entity that employs the family office staff is a separate question again, and it needs its own paper.
- A holding company owning operating subsidiaries isolates liability, enables the sale of one business line without unwinding the rest, and centralizes governance
- Real estate belongs in its own entity and should be leased to the operating company at a documented, arm’s-length rate; commingled real estate is the most common finding in commercial real estate diligence
- The family office management entity is usually an LLC owned by family trusts, employing the staff and contracting with each family entity under a written services agreement
- Section 1202 qualified small business stock now excludes the greater of $15 million or ten times basis, against a $75 million gross-asset ceiling, with tiered 50, 75, and 100 percent exclusions at three, four, and five years for stock acquired after July 4, 2025
- Trust ownership of operating equity requires a trustee who can actually vote the shares and a written mechanism for resolving conflicts between fiduciary duty and family expectation
- Families with regulated operating assets in liquor, healthcare, firearms, or cannabis need an entity chart that satisfies the licensing authority before it satisfies the tax adviser, which is where regulated operating-company consulting and cannabis licensing counsel belong at the table early
Structure is inexpensive when it is built deliberately and expensive when it is retrofitted under a signed letter of intent.
Regulatory and Compliance Considerations
Family offices tend to assume they are unregulated. They are not; they are conditionally excluded, which is a different thing entirely. The exclusion that keeps a family office out of investment adviser registration depends on facts the family controls and can inadvertently change. Layered on top are beneficial ownership rules that shifted significantly in 2025, state licensing obligations for regulated operating assets, and the plain fact that a family office is an employer.
- The SEC family office rule, Rule 202(a)(11)(G)-1, excludes a qualifying family office from adviser registration only if it advises solely family clients, is wholly owned by family clients and controlled by family members or family entities, and never holds itself out to the public as an investment adviser; the SEC publishes a small entity compliance guide on the rule
- Accepting capital from a non-family co-investor, a key employee, or a longtime friend can quietly break the exclusion the entire structure depends on
- Beneficial ownership reporting changed materially when FinCEN’s March 2025 interim final rule exempted entities formed in the United States and U.S. persons from reporting, narrowing the definition of reporting company to foreign-formed entities registered to do business here; current guidance sits at FinCEN’s beneficial ownership information page
- State licensing sits on top of everything for regulated operating assets, and a change in the family’s ownership chart is frequently a reportable change of control
- The family office is an employer, with household staff, worker classification exposure, confidentiality agreements, and restrictive-covenant limits that most families have never had reviewed by an employment lawyer
- Access to family financial data after a divorce, a death, or a departure should be governed by written policy rather than by whoever still has the password
Compliance failures inside a family office rarely produce a fine. They produce a disqualified structure at the worst possible moment.
Due Diligence and Common Risk Areas
When a family office sells a business, buys one, or brings in outside capital, diligence exposes decades of informality in a matter of weeks. Family office counsel earns its fee in the ninety days before a letter of intent rather than in the thirty days after one. The findings are remarkably consistent across industries, and nearly all of them are cheap to fix in advance.
- Missing or unsigned minutes, consents, and stock ledgers, producing ownership percentages that everybody knows and no document confirms
- Undocumented intercompany loans moving between the operating company, the real estate entity, and individual family members
- Personal expenses run through the operating company, which distorts EBITDA, invites a purchase-price reduction, and creates tax exposure at the same time
- Related-party leases with no written term, no rent escalator, and no assignment provision, which a buyer will require before closing
- Buy-sell agreements signed decades ago, never updated, and now containing a valuation formula no party would accept today
- Key-person dependence, where a single founder holds the customer relationships, the pricing authority, and the administrative credentials
Each of these is inexpensive to correct on your own schedule and painfully expensive to correct at the closing table.
Key Governance and Buy-Sell Provisions
The buy-sell agreement is the single most consequential document a closely held family business owns, and it is the one most likely to be out of date. The Supreme Court’s 2024 decision in Connelly v. United States rewrote the arithmetic on the funding structure that thousands of these companies still use, and most of them have not revisited it. Every provision below deserves a fresh read against current law and the family’s actual circumstances.
- Valuation mechanism: a formula, a defined appraisal process, or a certificate of agreed value that is genuinely refreshed on a stated schedule rather than signed once and filed
- Triggering events defined precisely, because death, disability, divorce, bankruptcy, termination of employment, and voluntary transfer each warrant a different consequence
- Funding: in Connelly v. United States, decided unanimously in June 2024, the Court held that corporate-owned life insurance proceeds used to redeem a deceased shareholder’s stock are a corporate asset for valuation purposes, and the obligation to redeem does not offset them, which increased the estate’s tax exposure substantially
- Because of Connelly, cross-purchase arrangements and insurance LLCs deserve a fresh comparison against the redemption structures most closely held companies still have in place
- Transfer restrictions: rights of first refusal, permitted-transferee carve-outs for trusts and estate planning vehicles, and drag-along and tag-along rights that anticipate a third-party sale
- Deadlock and exit: a written mechanism for breaking a tie among siblings and a buyout path that does not require filing suit, which is the difference between a negotiation and business litigation
A buy-sell agreement is only as reliable as the last time somebody read it out loud with the current owners in the room.
Howard East Family Office Counsel Services
Howard East provides family office counsel to families whose wealth is still tied to an operating company rather than to a purely financial portfolio. That focus shapes the work: we spend more time on shareholder agreements, related-party leases, and succession mechanics than on securities selection, and we coordinate directly with the family’s existing tax and wealth advisers rather than replacing them.
- Holding company and entity architecture, including formation, restructuring, intercompany agreements, and cleanup of legacy entities nobody has looked at in years
- Buy-sell, shareholder, operating, and partnership agreements, drafted from scratch and, more often, rewritten after a Connelly review
- Family governance documents, including family constitutions, board and advisory board charters, and written employment policies for family members
- Operating-company mergers and acquisitions on both sides of the table, from letter of intent through post-closing indemnity administration
- Outside general counsel engagements for families that need a lawyer on call rather than a discrete project
- Dispute work when governance fails, including partnership and shareholder dispute strategy and negotiated exits that avoid a public filing
We bill hourly, we scope every engagement in writing, and we tell families plainly when the correct answer is that nothing needs to change.
Why Family Office Counsel Matters for Closely Held Businesses
The generational transfer happens whether or not anyone plans for it. The only variable is whether the family decides the terms in advance or a court decides them afterward, usually at a cost that dwarfs what planning would have cost. Family office counsel is the mechanism for making that decision while everyone is still speaking to each other.
- Estate tax exposure is now easier to model with a $15 million per-person exemption in 2026, which makes the operating-company valuation the dominant remaining variable
- Connelly changed the tax result for a life-insurance funding structure that a large share of closely held companies still have on the books
- The SEC exclusion the family relies on is conditional and can be lost through a single well-intentioned investment on behalf of someone outside the family
- Sibling and shareholder disputes are almost always governance failures with a lawsuit attached, and the governance failure is visible years before the filing
- Regulated operating assets add a licensing dimension where the transfer itself requires regulatory approval, not merely a signature
- The cost of family office counsel is a rounding error measured against a single contested valuation or one unplanned redemption
Families rarely lose businesses because the market turned. They lose them because nobody wrote down what happens next.
Speak with an Attorney About Your Family Office
If you run a closely held operating company, oversee a single family office, or are preparing for a generational transfer, we will review your current structure and tell you what actually needs attention. Initial conversations are confidential and carry no obligation.
Request a Confidential Call
Tell us about your family office, your operating company, or the transfer you are planning. We review inquiries and respond within one business day.