How can a family switch multifamily offices while maintaining investment and tax continuity?
Plan the move as a controlled record and account transfer. Keep positions invested where practical, preserve cost basis and tax files, appoint one transition lead, and require both offices to reconcile holdings, beneficiaries, entities, and reporting before closing the old relationship. Use qualified tax and legal professionals for situation-specific decisions.
Build a complete transition file
Start with a current inventory of every account, entity, trust, private investment, insurance policy, loan, and outside adviser. Include account numbers, registrations, beneficiaries, cost basis, unrealized gains, tax lots, capital account statements, subscription documents, and relevant tax filings. The IRS explains that taxpayers should keep accurate records for items affecting the basis of property. See IRS Publication 551 for that recordkeeping guidance. IRS Publication 551
Ask the current office for a final holdings file and copies of source documents. Ask the incoming office to map each asset to the correct legal owner and reporting entity. Have the family appoint one person to approve data, deadlines, and open issues. Keep read-only access to the old reporting system until the first complete reporting cycle is reconciled.
Transfer investments with minimal disruption
For eligible brokerage assets, request an in-kind transfer through the Automated Customer Account Transfer Service, or ACATS. The SEC explains that most account transfers use ACATS and that the receiving firm starts the process with transfer instructions. SEC Investor Bulletin
Ask both firms to identify assets that cannot transfer electronically, such as certain private funds, restricted securities, proprietary products, or fractional interests. Decide separately whether each position should transfer, remain temporarily, or be sold after reviewing liquidity, restrictions, and potential tax effects. Do not assume that a transfer preserves every investment feature. Obtain written confirmation of cash balances, pending trades, pledged assets, and standing instructions before the old account closes.
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Protect tax continuity after the move
Give the new office and tax preparer prior tax returns, estimated-tax payments, charitable records, partnership and trust schedules, K-1s, realized-gain reports, and loss-carryforward schedules, as applicable. Reconcile tax lots and adjusted basis after assets arrive. Compare the first statement from the new office with the last statement from the old office, then compare both with the custodian's tax report.
Keep a dated log of transfers, sales, distributions, fees, and changes in ownership. Ask the tax professional to review any proposed liquidation, contribution, distribution, or entity change before it occurs. The goal is accurate reporting and an auditable record. This page is educational and does not provide legal, tax, or investment advice.
Related guides
- How to Switch Multifamily Offices Without Losing Momentum
- Tax Coordination With a Multifamily Office: A Practical Guide for Real Estate Families