Family office in New York: operating at the centre of US capital markets while managing state tax and trust constraints

New York has no family office licensing regime of its own; the starting point is the federal family office rule, Rule 202(a)(11)(G)-1 under the Investment Advisers Act. An office that has only family clients, is wholly owned by family clients, is exclusively controlled by family members or family entities, and does not hold itself out to the public as an investment adviser is not an investment adviser at all. New York's own adviser statute, General Business Law §359-eee, applies to persons who advise the public about securities for compensation. It also excludes advisers with fewer than six New York clients in the past twelve months and federally covered advisers. There is no express family office carve-out in the state statute, so New York counsel should confirm the office's position. Federal market filings still apply in full to an excluded office: Schedules 13D and 13G, Form 13F once discretion reaches US$100 million in 13(f) securities, Form 13H and Hart-Scott-Rodino.

The regulatory consequences of becoming a multi-family office are unusual in New York. Under the SEC's mid-sized adviser framework, New York is the state whose advisers are treated as not subject to state examination. An adviser with its principal office in New York and US$25 million to US$100 million of regulatory assets under management therefore registers with the SEC rather than with the state. Smaller advisers register with the New York State Department of Law. A family that shares its office or markets its platform should plan for registration, compliance policies and a chief compliance officer. A common approach is to keep the excluded single-family office separate and form a registered affiliate for any outside business.

Tax is the main structural constraint. New York State taxes residents on worldwide income at rates up to 10.9% for income above US$25 million. The 2025-2026 budget extended the high-income rates through tax year 2032. New York City adds up to 3.876%. A person is a resident if domiciled in New York, or, under the statutory residence test, if they keep a permanent place of abode there and spend more than 183 days in the state. New York also levies its own estate tax. The basic exclusion amount for 2026 deaths is US$7,350,000, well below the federal US$15 million. Under the cliff rule, an estate that exceeds the exclusion by more than 5% loses it entirely. The three-year addback of taxable gifts made before death was extended in the 2025-2026 budget.

New York trust law is less flexible than that of the leading trust states. New York keeps a rule against perpetuities (EPTL 9-1.1) and has no general directed-trust statute. Bar-backed proposals for one had not been enacted as far as we could confirm. New York residents therefore usually create long-term dynasty and directed trusts in Delaware, South Dakota or another trust state. A trust created by a New York domiciliary is still a New York resident trust. It can be an exempt resident trust, not taxed in New York, if it has no New York trustees, no New York real or tangible property and no New York-source income. Since 2014, New York beneficiaries are subject to a throwback tax on accumulated income distributed from exempt resident trusts. Incomplete gift non-grantor (ING or DING) trusts created by New York residents are taxed to the grantor for New York purposes. On transparency, the New York LLC Transparency Act took effect on 1 January 2026. After the Governor vetoed a broader bill in December 2025, it applies only to LLCs formed outside the United States and authorised to do business in New York. US-formed LLCs, including New York and Delaware LLCs, have no filing obligation under it.