A family inherits for six generations

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There is a saying that the wealth only inherits for three generations. This is not alarmist. Statistics show that the average lifespan of Chinese family businesses is 24 years. Less than 30% of family businesses are passed down to the second generation and less than 10% are passed down to the third generation. However, in this world, there are some ancient family businesses that have survived the baptism of a hundred years, and have always been shining with golden light. The family office is their important support, and the Rockefeller family is a typical example of them.

 

In 1858, John Rockefeller started his own business, then entered the oil refining industry, and continued to expand, eventually becoming the “oil king” and the first billionaire in human history. Today, the Rockefeller family has passed down to the sixth generation and is still prosperous. During this period, they have experienced two world wars as well as numerous economic crises. The Rockefeller family can endure for a long time, not only related to its excellent family education tradition and wealth values, but also inseparable from the help of the family office.

 

In 1882, Rockefeller established the world’s first family office, called “Room 5600”, which provides services to the family including investment, trust, law, accounting, family affairs, charity, and provides different investments according to the specific needs of family members Consultancy services. In 1934, Rockefeller II, as the settlor, established an irrevocable trust for his wife and six children. The beneficiaries were his wife and children, and the trustee was Rockefeller Private Trust Company. In addition, a trust committee has been established to handle the trust assets, while the family office is responsible for the investment of trust assets. Members of the Rockefeller family can receive dividend income from trust asset investment before the age of 30, but cannot use the principal. After the age of 30, they can use the principal, but they must obtain the approval of the trust committee.

 

The reason why Rockefeller II chose to pass on wealth in this way was because he believed that younger generations should not rely too much on the wealth of the family and need to exercise their independence and autonomy. Moreover, this can also avoid the failure of the family due to business failure. For those family members who are not suitable for business and have other pursuits in life, they can become simple beneficiaries, not being burdened by the family business, and freely choosing their own favorite lifestyle.

 

In the structure of the Rockefeller family, the ownership of wealth belongs to the private trust company, the control is in the hands of the trust committee, the management power is controlled by the family office, and family members only enjoy the right to income. With this structure, the family wealth is always a whole, and the wealth inheritance of the entire family business will not be affected by changes in the outside world.

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