Family Office & Trust Services Referral Case

Client Background – Mr. Chung

• Age: 64
• Occupation: Second-generation leader of a family-owned manufacturing business
• Family Status: Married with 3 adult children (all married); youngest daughter (35) recently welcomed her third child

Succession Challenges & Objectives

Planning to retire, Mr. Chung seeks to transition the family business smoothly while addressing the “shirtsleeves-to-shirtsleeves in three generations” risk. His key concerns:

1. Eldest Son: Unmarried, disinterested in the business, with a history of personal conduct issues.

2. Second Son: Actively involved in the family business and entrepreneurial ventures; married with 4 children; pragmatic and experienced.

3. Youngest Daughter: Overseas-educated, attempted entrepreneurship before focusing on family; retains business aspirations but lacks recent experience.

Mr. Chung prefers the second son as successor but worries about:

• Daughter’s Expectations: Potential friction if co-managing (e.g., “practitioner vs. theorist” dynamics).
• Family Harmony: Balancing fairness with business viability.

Professional Intervention & Solutions

A family office advisor team provided three-pillar support (legal, governance, emotional):

1. Family Constitution

• Defined core values and operational principles to guide future generations.
• Created a “modern family creed” to foster unity and accountability.

2. Family Council Facilitation

• Structured dialogues to align roles, expectations, and a fair succession plan (e.g., equity distribution, decision rights).
• Addressed latent conflicts (e.g., mismatched capabilities/ambitions among heirs).

3. Trust Structuring

Established a family trust to:

✓ Protect assets from external risks (e.g., eldest son’s liabilities).

✓ Retain control while enabling phased transitions.

✓ Pre-set distributions (e.g., living allowances, inheritance terms) to prevent disputes.

Outcomes & Insights

Mr. Chung valued the advisor’s neutral mediation and big-picture perspective, which:

• Reduced emotional tensions by depersonalizing decisions.
• Delivered a dual-focused roadmap for business continuity and family legacy.

The integrated plan achieved:

✅ Business Preparedness: Clear succession framework.

✅ Family Cohesion: Shared vision across generations.

(Note: Case specifics are illustrative; solutions require customization.)