In this issue
Ask the Experts: A son wonders whether to join his father’s firm
I really need some advice. I always wanted to be a computer engineer. I studied IT in one of my country’s best universities, but in my second year I decided to go abroad. I have been studying abroad for nine months.
I was quite happy with my studies, but suddenly my father called me and said he needed me to return home and help him in our family business. I was really surprised.
A self-taught successor
Bartow Morgan Jr. was a junior in college in 1994 when his father, the CEO of Brand Banking Company in Lawrenceville, Ga., died suddenly of a heart attack. “At 59, he hadn’t done all the things he planned to do,” says Morgan, now 34.
Morgan quickly graduated with a degree in economics and joined the bank “knowing nothing,” he admits. “I had a lot of theories, but no real-life knowledge of the business. It probably took me four or five years to get there.”
“Put not your trust in money, but put your money in trust,” advised Oliver Wendell Holmes Sr. Countless family businesses have taken this advice, placing operating family businesses under the control of trusts. They have good reasons for doing so.
Trusts can reduce or, in some cases, even eliminate estate taxes. They can protect business assets against claims arising from divorce, creditors or lawsuits. They can allow business leaders to take care of heirs who are too young, not business-minded or otherwise incapable of managing the affairs of the company.
The sheltered heir apparent and the price of impatience
Ralph Roberts, founder of the cable TV giant Comcast, produced five children but discouraged them from joining the firm. Four of his kids subsequently made careers in psychology, law, graphic design and community medicine. The exception was Roberts’ driven fourth child, Brian.