Privacy, continuity and governance are often the stated reasons for using trusts, foundations and holding companies in succession planning. All are valid. But when structures are tested, the more important question is usually narrower: where, exactly, does control sit?
In our earlier article on jurisdiction risk, we argued that family offices do not choose a jurisdiction for the sunny day, but for the storm.
The same is true of the structure itself. It is one thing for a succession plan to look coherent on paper. It is another for it to withstand incapacity, shifting family relationships, contested intentions, or an abrupt attempt to change course. Under that kind of pressure, the headline vehicle matters less than the control mechanics hidden within it.
The governance gap is not hard to spot. UBS reports that fewer than half of family offices have a wealth succession plan for family members, barely a quarter have a succession plan for the family office itself, and only 44% have a formal governance framework. In other words, many structures may look complete from the outside while remaining constitutionally thin where it matters most.
The wrong question
Family offices often ask whether a trust, a foundation or a HoldCo is the better structure. In practice, that is rarely the right question.
These vehicles do not solve the same problem in the same way. A trust may be chosen to separate legal ownership from beneficial enjoyment and provide stewardship across generations. A foundation may be chosen for its permanence, institutional character or civil law familiarity. A holding company may be chosen because it offers a cleaner way to organise voting rights, boards and operating assets.
Most serious family structures contain more than one of these layers. Operating businesses may sit under a HoldCo. The shares of that HoldCo may be held by a trust or foundation. Around them may sit letters of wishes, shareholder agreements, family governance documents and investment committee mandates.
This is not unusual. It reflects the fact that family offices are rarely solving for one objective alone. They are trying to balance continuity, privacy, governance, flexibility, protection and succession all at once.
The issue is not that structures are layered. The issue is that power often moves through those layers in ways that are poorly understood until something goes wrong. This is the interpretive layer: family constitutions, wishes, protocols and advisory bodies. These can be important, but they do not always carry the same legal force as the structure itself.
This distinction matters. A family may believe the structure says one thing because the family conversation says one thing. The documents may say another. The real power may sit somewhere else again.
The real structure
A family may think the trust sits at the top. In practice, the decisive power may sit with the person who can appoint the protector. Or remove a director. Or control the family office information flow. The legal wrapper may remain intact while the practical centre of gravity shifts elsewhere.
Who appoints the trustees? Who can remove them? Who chooses the directors of the HoldCo? Who can replace the protector? Who can amend the governing documents? Is there a veto? A casting vote? An emergency clause? Does anyone have a revocation right? Who receives information as of right, and who receives it only when relations remain good?
This is often the real structure, at least at the outset – the evolution of these dynamics is how apparently stable structures become unstable in practice.
How control shifts
Control often moves before the family realises it has moved.
A founder may continue to dominate informally long after powers have supposedly been transferred. A child with no headline authority may become decisive because they control information, access or adviser relationships. A spouse may hold no formal office but exercise practical influence across multiple layers. A protector role intended as oversight may become a power centre in its own right.
Much of this can happen without bad faith. Families are relational systems, not only legal systems. But informal power can coexist with formal governance only for so long before the gap becomes dangerous.
This is especially true where founders want both succession and optionality. They want to transfer authority, but preserve a route back. That instinct is understandable. But optionality is rarely free. It is often purchased at the expense of clarity.
Why good-looking structures fail
There are recurring patterns in structures that later become stressed. The first is contradiction. The trust deed points one way, the foundation rules another, the HoldCo constitution a third, and the family’s shared assumptions a fourth.
The second is reversibility. Powers intended as safety valves become tools of destabilisation. A right to amend, revoke or override may feel prudent in calm conditions. Under pressure, it can make every transfer of authority feel provisional.
The third is overreliance on informal authority. Many structures work not because the drafting is perfect, but because the founder still holds the system together by force of personality. Once that disappears, the machinery must operate on its own.
The fourth is emergency improvisation. The structure may function adequately in ordinary conditions, but have no convincing answer to incapacity, urgent decisions, contested influence or sudden loss of confidence.
The fifth is informational imbalance. One branch of the family may understand the architecture in detail while another experiences it only through occasional explanation. Resentment often starts not with money, but with opacity.
These are not exotic problems. They are ordinary governance problems. The Solorz matter, unfolding in Liechtenstein courts, offers a useful illustration. What appeared in public as a family and corporate dispute was, at a structural level, also a dispute about control mechanics: whether authority had been validly transferred during the founder’s lifetime, whether that transfer could be reversed, and what happened when a structure tried to combine decisive succession with retained optionality. For family offices, the lesson is not about one family or one jurisdiction. It is that activation clauses, revocation rights and founder protections should be read together as one control system, not as isolated safeguards.
The danger of cleverness
Family structures can suffer from a particular kind of over-engineering. The more cross-references, reserved powers and conditional pathways they contain, the more sophisticated they may appear.
Sometimes that complexity is justified. Often it is not.
There is a difference between nuance and over-design. Clauses intended to provide flexibility can create conflict. Layered controls can blur accountability rather than strengthen it. Documents that seem elegant to the drafting team may prove unworkable for the people expected to govern with them.
For family offices, clarity usually beats cleverness.
That does not mean simplistic drafting. It means a structure where each participant can answer the basic questions without interpretive theatre: who decides, who oversees, who can challenge, and what happens if the intended decision-maker cannot act.
What public disputes really show
Public disputes are useful not because they are identical to every private family conflict, but because they reveal what private families often prefer not to examine directly.
As our earlier article showed, the Solorz matter was instructive because it brought founder protections, revocation mechanics and succession design under pressure at the same time. The Murdoch dispute, by contrast, exposed the trust itself as the battleground for future control, amendment and fairness. The legal settings were different. The structural lesson was not.
In both cases, the public drama was not the real point. The real point was that when power and intention are disputed, everything turns on who retained which rights, whether those rights could still be exercised, and whether the structure had been designed for durability or only for temporary peace.
What better design looks like
First, clarity beats cleverness. Families should know where authority sits at each layer and how those layers interact.
Second, reversibility should be reduced where possible. If control is genuinely meant to move, the structure should not quietly preserve so many routes back that the transfer becomes unstable in practice.
Third, documents across the structure should be read as one system. Trust deeds, foundation rules, HoldCo constitutions, shareholder agreements and governance documents should not be drafted as if they belong to separate worlds.
Fourth, emergency governance should be distinguished from ordinary governance. A structure should explain not only how it works when everything is fine, but how it works when it is not.
Fifth, information rights should be taken seriously. Stability is not created by ensuring that fewer people understand the structure.
Finally, structures should be tested against live scenarios. What happens if the founder changes their mind? What happens if a key relationship breaks down? What happens if one part of the structure moves faster than the others? What happens if a decision must be made before the family agrees on what the documents mean?
If a structure cannot answer those questions in calm conditions, it is unlikely to answer them well in rougher ones.
The deeper point
Succession disputes are often described as emotional. They are. But in family capital, emotion alone rarely explains why matters become so difficult, so quickly.
What often turns tension into crisis is governance architecture that leaves too much unresolved until the moment of strain.
For family offices, the task is not simply to choose the right vehicle. It is to ensure that the control mechanics inside the structure are strong enough to survive disagreement without converting private tension into institutional crisis.
That is where succession plans succeed - or blow up.
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Caveat Emptor | This article is not legal, investment or tax advice.
This is an important distinction. In cross-border wealth planning, the structure itself matters less than understanding where ownership, control and decision-making actually sit. A trust, holding company or family office can each serve a different function, but problems often arise when those roles are blurred. Succession planning ultimately seems to be as much about governance as it is about legal structure.
"The legal wrapper may remain intact while the practical centre of gravity shifts elsewhere" is the entire point. Families pay for architecture. They inherit physics. Control does not move when the documents say it moves. It moves when phone calls rotate, when adviser loyalty shifts, when the founder stops being asked because everyone assumes. Revocation clauses destabilise not because of the clause itself, but because of the permanent uncertainty of "this could still be taken back". Nobody fully transfers under that shadow. Nobody fully governs under it either. Clarity is only expensive if you mistake optionality for prudence.