As high net-worth individuals have increasingly diverse portfolios, comprised of complex assets groups (e.g., closely held-businesses, real estate holdings, etc.), the ability of those individuals to personally oversee and manage such family wealth becomes more expensive and complicated, requiring the full-time assistance of many professionals, including lawyers, accountants and business advisors. Such complexity has led many individuals to establish a “family office” to oversee and manage such assets and to plan for the efficient and tax-advantaged transfer of that wealth from one generation to the next. In many cases, the “family office” essentially runs as a small (or, in some cases, not so small) business-type entity. While such a structure tends to be very effective in managing the family’s assets, it raises potential concerns in regard to the preservation of the attorney-client privilege.
New York law construing the attorney-client privilege has typically concerned the privilege when either an entity or an individual is the client. However, when a lawyer provides legal advice to an individual through a family office, New York law is unclear whether the individual or entity rules relating to the attorney-client privilege are applicable.
