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| Building Your Family's 100 Year Plan: The Series |
100 Year Plan Introduction: Making Meaning of Wealth Across Generations
Brett Anderson
12/01/2003
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W.R. realized this hope in his own will, providing the instrument of governance for the family’s long-term growth: the Hearst Family Trust. The trust is managed by a board of 13 trustees, five of whom are family members appointed for life. The trust will expire on the death of the last direct descendant alive at the time of W.R.’s own death—probably in another 50 years. Though some have argued that the trust’s governance has hindered its ability to respond to changing markets, they miss the important point: The goal is not to pad quarterly statements with short-term profits, but to serve family members with steady growth over the course of decades, even centuries.
Wealth management is not
a short- but a long-term process—one that must take into account third and fourth generations a century out. The Rockefeller family, whose wealth preservation efforts have been the model for many others, made this realization by force. John D. Rockefeller Sr.’s investment manager, Frederick T. Gates, warned the patriarch in 1906, "Your fortune is rolling up…like an avalanche! You must keep up with it! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children’s children!" Rockefeller heeded the warning, creating a series of foundations and trusts that would equal in scale and complexity the companies he had built. The driving issues were both personal and financial, stemming from a desire to preserve the family’s businesses, as well as from the recognition that preservation was an ongoing process—one that had to be renewed with each generation. Nearly 100 years later, Rockefeller descendants continue to meet each year to make strategic decisions and to define their generation’s goals.
The survival of our families involves more than the management of assets; it requires that our families grow together, as individuals and as groups, and that financial resources be applied to strengthening the group spiritually as well as intellectually, preparing each person, in turn, to give back to future generations. A good 100-year plan functions, in this way, as a sort of perpetual engine, employing its resources to cultivate the potential of its members and renewing those financial and intellectual resources for the use of those yet to be born.
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