That’s what happened to 19th century robber baron Jay Gould, who was once one of the richest men of all time. Thanks to mismanagement of his assets by his oldest son, and then by his grandchildren, his billions had dissipated within decades.
Could that be averted with some better communication between generations? It’s unclear. But Forbes, delving into the history of the Hearst fortune, points out that sometimes a family business keeps succeeding, and paying dividends, because it is kept outside the family.
That was the secret for patriarch William Randolph Hearst, anyway: When he died, he made clear that he had no intention of allowing any of his five sons to take over his media empire. Instead, “control was to be in the hands of professional managers answering to a self-perpetuating board of trustees on which Hearst family members would have only five of 13 votes. The trusts would last until all the then-living grandchildren had died — an event likely to occur sometime around 2035. Any heir who challenged the will would be disinherited.”
Regardless of whether his plan to privatize made his heirs happy, it ensured that they would remain rich.
Today’s rich parents would do well to at least make a plan, experts agree. As Bill LaFond, president of family wealth at Wilmington Trust, tells the Post, “Everyone needs to be ready. You, the wealth holder, need to be ready for that conversation, and you have to be comfortable that your kids are ready for that conversation.”
Don’t miss: Self-made millionaire Eugene Lang set his kids up for success by not leaving them a dime
Like this story? Like us on Facebook!