You are meeting Mr Roger Zhang for the first time, upon request of his father, Mr Nigel Zhang, who has been your client for 10 years. Mr Nigel Zhang is 72 years old. He has three children: Lavinia, 24 years old, a student in law school in New York, and Roger, 29 years old, whom you are meeting, who just came back from London, where he studied Economics and who is currently working for an international bank for a fixed term contract of two years, and where he intends to go back to as soon as he finds another job. Lavinia and Roger are the children of Mr Nigel Zhang's second marriage, with Mali. Mr Nigel Zhang has a daughter from a previous marriage, Nina, 45 years old, domiciled in HongKong; she is married and has one daughter, who is unfortunately disabled. Lavinia and Roger still get along with their sister Nina, with whom they talk to on a weekly basis, Mr Nigel Zhang no longer has any relation with his first daughter Nina, given that he disapproved of her marriage and has never forgiven his daughter going against his opinion. Mr Nigel Zhang led a very successful carrier in the phone devices industry, which he started in the 1980s with his friend and schoolmate, the late Mr Quan Lee. They had managed the sales of smartphones and their business presently employs 10,000 people. They are a serious player in the smartphone industry today. From the outset, Mr Nigel Zhang was the rainmaker of the two, thanks to his technical background, capacity of innovation and networking skills. Mr Quan Lee, on the other hand, was the numbers-guy and ensured that the financials and budgets were proper at all times. Mr Nigel Zhang is presently still running the business with Mr Quan Lee's only son, who took over his father's COO position in the business after the older Mr Quan passed away. Two years ago, they hired an allegedly software genius, but so far, his capacity for innovation has proven to be very limited. Hence the younger Mr Quan is still leading the Innovation & Technology Department. In addition, Mr Nigel Zhang also inherited from his later father, 10 rental buildings in the center of London and 2 large office space buildings in Singapore. Each building is owned by a different company, where Mr Nigel Zhang was historically the sole shareholder, except for the largest property in London, which is registered in his own name. He appointed in each country a trustworthy real estate agent, to whom he delegated all of the day-to-day management of the buildings. Over time, both real estate agents decided to only take care of Mr Nigel Zhang's buildings and left the real estate agency they were respectively working for. While both agents have repeatedly drawn Mr Nigel Zhang's attention to the fact that one-man-is-no-man, Nigel says that he won't trust anyone else to take care of the buildings. One of the reasons for this is also that he has instructed his trusted real estate agents to pay the fees of the private institution in which Nina's daughter has been placed and where she receives the best care. Mr Nigel Zhang arranged that Nina be told that the funds were derived from a trust fund set up by his grandfather. Nina did not query further. 

 

Mr Nigel Zhang is still married to his second wife, Mali, but they no longer live together. Since their parting, Mr Nigel Zhang has ensured that she would be maintained in a manner similar to that as when they lived together. In addition, last year Mr Nigel Zhang gave his wife 50% of the shares of the two London property-owning companies, from which the expenses of Nina's daughter's institutional expenses were payed. Mali has not withdrawn any funds from either of the companies since becoming a shareholder. Mr Nigel Zhang has opened 3 large accounts with your bank: one receiving his profits from his smartphone business, one receiving the rents of the buildings, and one in which he piles up his savings and which he has instructed you to invest entirely in private equity (average investment time being 10 years). He seldom leaves more than SG$ 1 million in each of the two first accounts. Mr Nigel Zhang recently informed Roger and Lavinia that he wrote a will, detailing how his estate should be divided. When he showed his will to his daughter Lavinia, she immediately called her brother to tell him that their father must be out of his mind: "The will is XX pages long, she said, and every detail you can think of is in there." While Roger couldn't quite see why this should be an issue - "the more indications we have, the better", he told his sister. But Lavinia convinced him that he should talk to his father as soon as he set foot back in Singapore, which he did. Mr Nigel Zhang called you a few days ago to ask you to meet with his son. He tells you everything that is covered in his will, that he has no time to waste on this any further, but that he agrees that his son can discuss with you to set out: a) what issues he may not have covered and b) what your bank's advice is to address them. He reminds you that he believes his son wants to take over his position in the smartphone company and that, in his will, he covered the necessity of compensating his daughter Lavinia and their mother. He mentions nothing about his first daughter, which you understand means that he intends to leave her with nothing. Before he hangs up, Mr Nigel Zhang asks you how much is left on the joint account he opened with Mrs Samantha Poo, with whom he has been emotionally involved for 2 years now, and tells you he will be transferring SG$ 1 million tomorrow into that account. Friendly reminder: as you are meeting Roger for the first time, you need to start from scratch! 

 

Mr Nigel Zhang is still married to his second wife, Mali, but they no longer live together. Since their parting, Mr Nigel Zhang has ensured that she would be maintained in a manner similar to that as when they lived together. In addition, last year Mr Nigel Zhang gave his wife 50% of the shares of the two London property-owning companies, from which the expenses of Nina's daughter's institutional expenses were payed. Mali has not withdrawn any funds from either of the companies since becoming a shareholder. Mr Nigel Zhang has opened 3 large accounts with your bank: one receiving his profits from his smartphone business, one receiving the rents of the buildings, and one in which he piles up his savings and which he has instructed you to invest entirely in private equity (average investment time being 10 years). He seldom leaves more than SG$ 1 million in each of the two first accounts. Mr Nigel Zhang recently informed Roger and Lavinia that he wrote a will, detailing how his estate should be divided. When he showed his will to his daughter Lavinia, she immediately called her brother to tell him that their father must be out of his mind: "The will is XX pages long, she said, and every detail you can think of is in there." While Roger couldn't quite see why this should be an issue - "the more indications we have, the better", he told his sister. But Lavinia convinced him that he should talk to his father as soon as he set foot back in Singapore, which he did. Mr Nigel Zhang called you a few days ago to ask you to meet with his son. He tells you everything that is covered in his will, that he has no time to waste on this any further, but that he agrees that his son can discuss with you to set out: a) what issues he may not have covered and b) what your bank's advice is to address them. He reminds you that he believes his son wants to take over his position in the smartphone company and that, in his will, he covered the necessity of compensating his daughter Lavinia and their mother. He mentions nothing about his first daughter, which you understand means that he intends to leave her with nothing. Before he hangs up, Mr Nigel Zhang asks you how much is left on the joint account he opened with Mrs Samantha Poo, with whom he has been emotionally involved for 2 years now, and tells you he will be transferring SG$ 1 million tomorrow into that account. Friendly reminder: as you are meeting Roger for the first time, you need to start from scratch! 

 

Question 1: The new information you obtained needs to put together like a jigsaw puzzle before you meet Roger tomorrow.

 1. Firstly, what do you think are the wealth and estate planning objectives of the family in this case?

 a) Roger may or may not be conscious of his personal preferences and values, which may affectthe design ofsolutions. 

b) Are there special needsthat you must pay special attention too? 

2. Secondly, given the many facets to the case, would you engage a wealth and estate-planning specialist for tomorrow's meeting?

 a) Please explain your choice.

b) Whatever your decision, how would you structure this wealth planning conversation with Roger or facilitate a productive and focused discussion, together with relevant internal specialist(s), at tomorrow's meeting? 

 

Question 2 ): What are some of the typical challenges facing family firms in succession planning and longterm sustainability (highlighting those which seem relevant to Roger)? 

a) How would you approach the meeting with Rogerto better understand the characteristics of hisfamily business and family structures, and potentially discuss some common solutions to preserve family wealth and control through successful transition?

 b) What questions would you ask Roger about his family business and to gather more information in order to solve her apparent concern about her future engagement in the company?

 c) Please explain how family offices are set up and the role they play in context ofthe information obtained thus far.