Starting or creating a family office
How Can a Family Office Create a Reliable Record of Its Assets and Liabilities?
Short answer. Build the record from statements, ownership documents, loan records, and adviser confirmations. Match each item to a named entity and owner. Track the source and date of every value, flag gaps instead of guessing, and set a regular review process so the family can see what is known and what needs follow-up.
An asset and liability record needs source documents and a consistent process for checking them. The office should trace each line item to evidence, identify its owner, and state when its value or balance was last confirmed.
Set the Record's Scope
Agree on which people and trusts the record will cover, then identify the entities and accounts tied to them. Include investment and bank accounts, private company interests, real estate, loans, and guarantees or other obligations within the agreed scope. Separate assets owned personally from those held by an entity or trust. Record the legal owner, documented beneficial interests, account or entity identifier, custodian or counterparty, and the office contact responsible for follow-up.
Use a consistent format for asset description, currency, valuation date, source document, and any information limits. For private assets without a current statement or independent valuation, mark the value as estimated or unavailable and state what evidence supports it. Do not present an old estimate as a current confirmed value.
Gather and Reconcile Evidence
Request account and capital account statements, loan statements, partnership records, deeds or ownership schedules, and relevant adviser reports. Ask each institution for the account registration and authorized contacts, plus the valuation date, cash balance, positions, transactions, fees, and pending activity needed for your reporting purpose. Obtain liability details such as principal, interest terms, maturity date, collateral, and any guarantees or payment status where applicable. Talk with your attorney or CPA about documenting entity ownership and tax records.
Compare information across sources. Match account totals to statements, check that the same asset has not been counted twice, and distinguish a direct holding from an interest held through an entity. Reconcile cash movements and liabilities to the relevant records. When figures differ, keep both source values, note the reason if known, and assign someone to resolve the discrepancy. Make uncertainty visible in the record.
Maintain a Controlled Record
Choose a secure system with access limited to people who need the information. Organize source files by entity and reporting period, preserve prior versions, and log ownership changes alongside balances and valuations. Assign one person to maintain the master record and a reviewer to check significant updates. Set a recurring schedule for requesting statements and confirmations, and track missing items until they arrive.
These habits support recurring reporting and help the family understand obligations over different time horizons. For related planning, see recurring processes to map before opening, information to collect from banks and advisers, and organizing contracts, tax records, and estate documents. Agree on reporting responsibilities before the first family report is due, and record who confirmed each item.
Family offices have short term liabilities and intermediate term liabilities and long term liabilities.
Sources: The Family Office Book. Informational only, not financial, legal or tax advice.