How to Draft a Family Office AI Policy

Protecting sensitive information should be the highest priority. Staff should not enter confidential information into a public or any AI tool not covered by the AI policy, including: family, financial, legal, tax, investment, estate, health, travel, security or personal information.

This includes family member names, account details, holdings, trust documents, tax returns, philanthropic plans, private communications and security arrangements. A simple rule often applies: If information would not be shared publicly or casually with an outside vendor, it should not be entered into an unapproved AI platform.

AI should support decision-making, not replace human judgment. Family office decisions often involve personal context, fiduciary duties and long-term consequences that AI cannot fully understand.

AI-generated content should be reviewed before it is relied upon or shared, especially for investment, legal, tax, estate or advisor-related matters. AI may prepare a first draft or organize information, but final judgment must remain with the responsible employee, senior leader or advisor.

The office should define where AI is appropriate and where it is not. Appropriate uses may include drafting generic internal documents, summarizing public articles, preparing meeting agendas, creating checklists, organizing non-confidential notes and improving administrative efficiency.

AI should not be the sole basis for sensitive decisions, including investment recommendations, manager selection, legal interpretation, tax strategy, estate planning, employment decisions, cybersecurity decisions or communications involving family reputation.

Access controls are critically important. The office should maintain a short list of approved AI tools and identify who may use them.

Access should be limited to employees who need the tool and understand the policy. When an employee leaves or changes responsibilities, access should be reviewed and updated.

Before using an AI provider, the office should evaluate whether the vendor under consideration is trustworthy and appropriate for the intended use. The office should apply a practical, risk-based review process with clear standards.

Key considerations include security standards, privacy practices, data retention, contractual terms and whether submitted data may be used to train the vendor’s models. For sensitive uses, legal, compliance and technology advisors should be consulted as needed.

AI use should reflect the values and professionalism of the family office. Even non-confidential outputs can create reputational risk if they are inaccurate or inconsistent with family expectations.

Communications to family members, trustees, beneficiaries and other external parties should be reviewed before being shared.

AI risks include inaccurate outputs, bias, confidentiality exposure, cybersecurity concerns, intellectual property issues, regulatory implications and overreliance.

The office should use a risk-based approach. Low-risk uses, such as summarizing public information, may require minimal review, while higher-risk legal, tax, investment or estate-related matters should require review by senior staff or outside advisors.

Regardless of the size of a family office a formal AI committee may not be necessary, but the office should assign clear ownership. One senior person or a small group should be responsible for the policy, approved tool list, employee guidance and periodic review.

This may be the managing director, COO, chief of staff, general counsel or another trusted leader. Employees should know who to ask before using a new AI tool or applying AI to a sensitive matter.

All employees should receive basic training on approved AI tools, prohibited uses, confidentiality expectations and when to seek approval.

Training should be practical and scenario-based, using examples such as summarizing a public article, drafting a generic agenda, reviewing a confidential trust document or preparing an investment memo.

AI tools, risks and regulations are changing quickly, so the policy should be reviewed formally at least annually and updated when the office adopts a new tool, changes vendors, expands AI use or identifies a new risk.

The office should also monitor changes in privacy law, cybersecurity expectations, financial regulation and AI governance best practices. The goal is a flexible framework that remains useful as technology evolves.