How Can a Family Decide Who Has Authority to Approve Spending and Investments?

A family can decide authority by writing down who proposes, reviews, approves, and carries out each kind of spending or investment decision. Clear roles reduce delays and make it easier to see whether a decision received the right review.

Start With the Decisions

List the decisions the office will handle, such as routine operating expenses, payments to relatives, charitable giving, investment commitments, portfolio changes, and opening accounts. For each one, record who may bring a request forward, who checks the supporting information, who approves it, and who executes it. Keep routine work moving by giving staff or an office leader authority within defined limits. Reserve decisions with broader family effects for the family members or committee the family names.

Authority should follow the family's purpose and governance arrangements. The family may choose to have an investment committee review allocations while a designated officer handles ordinary expenses. The important point is that the roles are understood before a decision arrives. The single family office governance guide can help frame these questions.

Set Limits and Safeguards

Use both dollar limits and decision types. A payment below an agreed amount might need one approval, while a larger payment could require two authorized signers. An investment might require a documented review regardless of size, especially if it changes the portfolio plan or involves a conflict of interest. Define how exceptions are handled so urgency does not become a reason to skip review.

Separate approval from execution where practical. The person entering a wire or preparing a payment should not be the only person able to approve and release it. A small office can still use a second family approver, an outside bookkeeper, or a bank control that requires another authorization. Keep records of the request, approval, supporting material, and completed payment.

Make Investment Authority Explicit

For investments, specify who sets the investment policy, who can recommend changes, who conducts due diligence, and who gives final approval. The family can set a threshold for committee or board review, but a threshold alone is not enough. The policy should explain what information reviewers need and how conflicts are disclosed. Revisit delegated authority when the office's responsibilities or family structure changes.

In my experience, governance works best when people can tell which decisions are theirs and which need to go back to the family. Put the framework in writing, explain it to staff and relatives, and check that account signatories match the stated rules. For more on setting up authority and roles, see fundamentals of creating a single family office and investment committees and advisory boards. For legal or tax details about the structure, talk with your attorney or CPA.

Governance overall is critical to decide who makes decisions, who needs to sign what, who controls the money, who has authority to know balances or investments, how allocations are made, how the board is formed, who can be fired when and by who, rules and procedures for running the family office.

Sources: The Family Office Book. Informational only, not financial, legal or tax advice.