Family Office Structures Explained: Which One Is Right for Your Legacy?

As family wealth expands, so does the responsibility of managing it—efficiently, securely, and in alignment with long-term goals. A family office offers the ideal structure to handle everything from tax planning and investment management to estate strategy and philanthropic giving.

But with several models available—Single-Family Office (SFO), Multi-Family Office (MFO), and Virtual/Outsourced Family Office (VFO/OFO)—how do you know which one is right for your family’s future?

This article unpacks each structure, their advantages and challenges, and the key factors to help you make the right choice for preserving your wealth and legacy.

What is a family office and why it matters

A family office is a private entity established to manage a family's collective financial and personal affairs. But it’s more than just an investment hub, it’s a full-service model designed to address the evolving needs of wealthy families.

Services can range from investment strategy and tax planning to estate administration, philanthropic advising, and even concierge services.

Common functions of a family office include: 

• Comprehensive wealth management 
• Multi-generational estate planning 
• Tax strategy and compliance 
• Risk and insurance management 
• Charitable giving and philanthropy 
• Family governance and education 
• Private investment opportunities 
• Succession and legacy planning 

Types of family office structures 

1. Single-family office (SFO) 

• An SFO is a bespoke, in-house solution serving just one family. It's typically formed as a legal entity and staffed with dedicated professionals such as financial advisors, tax professionals, attorneys, investment managers, and even lifestyle specialists. 

Pros:

• Full control and customization 
• Maximum confidentiality and data protection 
• Tailored reporting and services 
• Alignment with family culture and values 

Cons: 

• High operating costs (can range from $1M–$10M+ annually) 
• Complex setup and management 
• Requires internal governance and HR oversight 

Best suited for: Families with assets exceeding $100M 

2. Multi-family office (MFO) 

An MFO is a shared-services model where multiple unrelated families access sophisticated wealth management under one umbrella. Each family pays for their portion of services, gaining scale benefits and professional-grade management. 

Pros:

• Lower cost of entry 
• Turnkey solution with established infrastructure 
• Access to institutional-quality investments and professionals 
• Lower operational burden 

Cons:

• Less control over service delivery 
• Potential privacy trade-offs 
• Limited customization 

Best suited for: Families with $10M–$100M in investable assets 

3. Virtual or outsourced family office (VFO/OFO) 

A VFO/ OFO relies on a lean in-house structure, outsourcing most functions to third-party professionals such as CPA firms, law firms, or RIAs (Registered Investment Advisors). 

Pros:

• Scalable and cost-efficient 
• Customizable using best-in-class providers 
• Minimal staffing requirements 
• Quick to establish 

Cons:

• Less cohesion among service providers 
• Requires active coordination 
• Quality varies based on vendor selection 

Best suited for: Emerging wealth or families transitioning toward formal structures

Comparison of Family Office Structures: SFO vs. MFO vs. VFO

Key factors to consider when choosing a family office structure 

Selecting the right structure is not just about costs—it’s about control, customization, and confidentiality. Here are the major factors to weigh: 

1. Size and complexity of family wealth 

• Families with over $100 million in assets may benefit from a Single-Family Office (SFO) for full control and customization. 
• Families with $10M–$100M may consider a Multi-Family Office (MFO) to access institutional-grade services at a lower cost. 
• For families with $5M–$50M in assets who need personalized service but don’t require a dedicated in-house team, VFOs can work. It’s scalable as wealth grows or complexity increases. 

2. Level of control desired 

• SFO: Full autonomy over operations, investment strategy, and hiring decisions. 
• MFO: Delegated control with professional management; better for families preferring a hands-off approach. 
• VFO: Provides a balanced level of control—families can handpick and directly manage outsourced experts while staying involved in strategy and oversight. 

3. Cost and scalability 

• SFO: High startup and maintenance costs (staffing, tech, compliance).
• MFO: Shared costs with other families, making it more cost-effective; however, flexibility may be limited by standard offerings.
• VFO: Offers cost efficiency and flexibility by using a lean model—services are outsourced as needed, with minimal fixed costs. Highly scalable without committing to a large team.

4. Confidentiality and privacy 

• SFOs provide heightened privacy—ideal for families with public profiles.
• MFOs may have limitations due to shared advisors and systems.
• VFOs offer moderate to high confidentiality, depending on how services are structured, and which providers are chosen. Privacy can be preserved with proper safeguards.

5. Philanthropic goals 

• SFO: Can build a dedicated in-house philanthropic team for mission-driven families. 
• MFO: May offer access to standardized philanthropic services but less personalized. 
• VFO: Allows families to engage external philanthropic consultants or firms, creating a customized yet lean approach to charitable planning. 

Not sure how your current wealth structure impacts your tax or estate plan? Let Smart Accountants provide a detailed evaluation to help you make informed, future-ready decisions. Contact us today.

Critical questions to ask before choosing a structure

Before committing to any family office model, consider these essential questions to clarify your needs: 

• What is the total value of your family assets?
• How complex is your current financial, tax, and estate arrangements?
• How many family members are actively involved in wealth decisions?
• What level of control and customization do you want?
• Are you planning for multiple generations or just the current one?
• What is your family’s long-term vision (e.g., legacy, philanthropy, investment)?
• How important is privacy to your family?

When should you reassess your structure?

Wealth is dynamic—your family office should be too. Consider reassessing your structure during: 

• A liquidity event (e.g., business sale, IPO, divorce, inheritance) 
• Generational transitions or changes in leadership 
• Significant tax law changes or regulatory shifts 
• Expanding philanthropic missions 
• Escalating costs without measurable ROI

Has your family’s financial picture changed recently? Smart Accountants specializes in transitional planning and can help you realign your office for evolving needs. Reach out to us to get started.

Benefits of working with a CPA firm for family office design 

Partnering with a qualified CPA firm that specializes in family offices ensures you receive not only financial clarity but also strategic insight across every dimension of wealth. 

What a CPA firm brings to the table: 

• Tax efficiency across generations 
• Integrated financial and estate planning 
• Regulatory and compliance expertise 
• Audit and financial reporting 
• Risk management strategy 
• Business succession advisory 
• Philanthropic structure optimization (e.g., donor-advised funds, private foundations) 

A CPA-led family office is uniquely positioned to combine precision with a forward-thinking wealth strategy.

Final thoughts: Crafting a structure that honors your legacy 

Choosing the right family office structure is about aligning wealth with purpose, efficiency, and generational continuity. Whether you're just starting your journey or evolving an existing office, a thoughtful structure ensures your wealth supports your family's vision—today and for generations to come. 

If you're considering the next steps or reassessing your current setup, we're here to help! 

At Smart Accountants, our expert family office advisors and CPAs work with families like yours to design future-proof strategies that balance control, cost, and long-term value. 

Contact us today for a personalized consultation!