Am I Still Invited to the Family Retreat?

Who is family? Well, it depends doesn’t it? You may have read a headline where a long lost child has ordered a paternity test to determine their biological parent and claim entry into the family “clan.” There are some for whom family is the entire village exclaiming that we are all responsible for each other. For others, family is their circle of friends. These people left their blood ties long ago. For still others family is their direct blood line…legal blood line.

 What you might not know is that recently the SEC, the Security and Exchange Commission, one of the financial industry’s overseers, updated their definition of who a family member is. “The SEC” you might ask, “what are they doing meddling about in definitions of family membership?”

 That is a valid question, one that can be hotly debated…until their next update to the definition of who is a family member.

They made an update for Family Offices, those who manage families of great wealth. The Family Office industry is growing by leaps and bounds. Their management includes the oversight of money affairs. That is why the SEC is involved. I know it sounds like a stretch. In any case, they are involved.

 What did the SEC say about who is a family member? “A family member includes cohabiting partners, opposite sex or same sex, who live in a relationship tantamount to marriage. Who is excluded? The excluded include in-laws and step children of a parent who divorced the step-parent.

To quote the regulation question and answer summary of their new rules: “Because under the rule ‘family client’ does not include the spouse or descendant of a former family member, a spouse who the stepchild married or a child born to the stepchild after the stepchild became a former family member is not a family member. However, a family office can continue to provide advisory services to the stepchild because the stepchild is still a family client.” (Posted January 19, 2012)

Was that clear?

What is the implication of this updated definition? For me it is that families have to look closely at who their family members are as they structure their family governance. It will matter as councils, policies and procedures are developed in family ‘legitage’ systems. It will matter because the matters of the family are determined by the family member leaders and councils.

Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: