In case you have been wondering whether using trusts and other estate planning tools to protect your hard-earned wealth is really necessary, look no further than the Stroh family. The Stroh Brewery Empire, valued by Forbes in the early '80s at about $9 billion in today's dollars, is all but a distant memory. A combination of bad decisions, bad luck, drug and alcohol abuse, and lavish spending led to the family losing the company--once American's third-largest beer brewer--and its fortune.
The term "from shirtsleeves to shirtsleeves in three generations" is quite accurate in the case of the Strohs. Bernhard Stroh immigrated to Detroit in 1850, peddling his beer recipe from door to door out of wheelbarrows. More than a century later, the still-family-owned company, run by the fourth generation of Strohs, suffered from some bad business decisions, followed by bad investments. Yet heirs abounded, most living the life of luxury on their dividends and bleeding the company dry. Frances Stroh, an heiress to the now-depleted Stroh fortune, documents the family's missteps in her book "Beer Money: A Memoir of Privilege and Loss."
"Heirs are not automatically qualified, competent or visionary leaders," said Dr. Michael McGerr, a professor in the history department at Indiana University. Whether your heirs stand to inherit a family-owned business, a small fortune, or a modest estate, it is still the fruit of your labor, and some relatively simple estate planning measures can be taken to protect it.
Source: New York Times