A growing number of billionaires are using trust not to just pass on wealth but to control how their empires operate long after they re gone. What founders view as protection is often viewed by their heirs as restriction. As family office advisor Kirby Rosplock says, what one generation might see as protection, the next generation experiences as restriction
00:00:45.400A growing number of billionaires are using trust not to just pass on wealth
00:00:48.620but to control how their empires operate long after they're gone.
00:00:52.540What founders view as protection is often viewed by heirs as restriction
00:00:56.260As family office advisor Kirby Rosplock puts it, what one generation might see as protection, the next generation experiences as restriction.
00:01:04.240The Pierre Castle case, the 99-year-old founder of a drinks empire worth roughly $10 billion, spent more than three decades constructing an elaborate succession structure.
00:01:14.040He consolidated ownership through Gibraltar, created a foundation in Liechtenstein, established a trust in Singapore.0.95
00:01:23.120That is some technical shit right there.0.86
00:01:24.900The goal was to minimize taxes, preserve the business, and prevent the future family conflict.0.97
00:01:29.800Instead, the succession plan itself has become the source of conflict.
00:01:34.260Earlier this year, Castle's daughter, Romy, and his nephew, Alain, attempted to remove the CEO chosen by Pierre Castle.
00:01:40.740The dispute has now reached Singapore's Supreme Court.
00:01:44.240At the center of the fight is the question, who actually controls the empire, the family or the trust structure created to constrain the family?
00:01:51.200Number two, separating ownership from control.
00:01:54.000One of the key features of modern billionaire succession planning is the separation of economic ownership from decision-making power.
00:02:00.700Family members may receive dividend and inherit wealth while being denied meaningful control over the business itself.
00:02:07.460Number three, last but not least, the real fight is control.
00:02:10.320Romy Castle argues that CEO Gregory Clark has accumulated excessive influence and is attempting to take control.
00:02:16.160The opposing side argues that the trust structure is functioning exactly as intended and that management should remain independent from family politics.
00:02:26.180You know, this is a headline because people, Bloomberg said, the heirs control from beyond the grave and they try to create clicks in a headline.
00:02:34.520But really, it's a very, very simple issue.0.99
00:02:37.460The little greedy bastards in the next generation want to go grab the money and have fun.1.00
00:03:35.500If you raise enabled spoiled brats, Pat, you can expect them after you're gone to go get lawyers and try to manipulate things and get there.
00:03:43.320But the story here that Bloomberg misses, and I'm not surprised that Bloomberg missed it, is that what about the family offices that somehow raised great kids and the feelings and the desires and the impact points of the family scion was maintained?
00:04:00.000I believe in education. Long after I'm gone, I want the following things to happen.
00:04:04.780And this is the way we're going to do it. You know, that's they're leaving out that part.
00:04:09.120Snyder, one sense you're kind of saying I'm setting this up because I know I'm a terrible father.
00:04:15.980I don't trust my children to take over the family business and maybe they know their kids well.
00:04:20.280But what Tom says is exactly right. But even if you do raise good children, there's still going to be conflict.
00:04:26.400Say you groom your son to be or your daughter to take over your family empire.
00:04:31.100They're going to have their own ideas anyway.
00:04:32.800There's always going to be a clash.0.99
00:04:34.080The trust and the lawyer are the redder.1.00
00:04:37.060But you can also make the other argument that when you have a beneficial economic interest, but you don't have active control, you're just a passive investor, there's always going to be legal and natural tension there.
00:04:48.260So I think the thrust of the story is you're inviting trouble, but there is no good solution to this other than to be a better father.
00:04:55.600Yeah. What's the alternative? The alternative is pretty much allowing everyone to fight over the money, destroy the business.
00:05:00.780How many generations? Let's be honest. They're going to they're going to fight anyway.
00:05:03.500They're going to do it anyway. But, you know, so how many generations?
00:05:07.320There's a study. It takes like three generations. Three to four. Yeah.
00:05:09.640So it's proven. I think that's right. It's proven.
00:05:12.360I saw people lose everything. I managed money for wealthy people.
00:05:14.920Vanderbilt only made it for two. Yeah. And I wouldn't be.
00:05:17.500Medici's did it right. Rockefeller's did it right. There's a few families that did it right.
00:05:20.960Medici's, I think they're on seventh or eighth generation.
00:05:24.200There's a lot of families that you'll look at on how they set them up.
00:05:27.140A lot of them have done it the right way.
00:05:29.300There's a book everybody who is concerned about this topic should buy.
00:05:34.420It's called Leave a Legacy, and he breaks down one of the studies,
00:05:37.800a study from Oxford that looked at families in the U.K.
00:05:43.040that had a lot of wealth that the money kept for over 1,000 years.
00:05:47.380That's a long time to keep within a family, right?
00:05:49.560In America right now, if you have slats that are set up, slats in some states allow you to keep the wealth and pass it down for 1,000 years.
00:05:58.480I think some of them are limited to 1,000.
00:07:40.620He can't do anything wrong in her eyes.
00:07:43.440The other one is trying to be him to run the business, the legacy business.
00:07:48.060His right-hand guy that gets in the business starts having so much influence over the company and the board that he flips the board against him.
00:07:56.020And there's a very good scene in this movie.
00:07:58.420So I do believe when I'm reading this story in this article about the fact that the kids are like, wait a minute, this CEO is getting a little bit too much power and is pinning us.
00:08:33.660You decide, of course, if they're going to be like, well, give us all the money now, bullshit.0.98
00:08:36.660But allow them to be involved in some of the decision-making process with the ability to reason and let them say, you came up with this decision.0.95