The great wealth transfer: succession battles, family trusts and inherited wealth
As first generation fortunes transfer to heirs around the world, courts in jurisdictions including the UK and Hong Kong are increasingly being asked to resolve disputes involving trusts, family businesses and succession planning. Advisers say many of these conflicts stem not from wealth itself, but from weak governance structures, unclear expectations and poor communication between generations. Private banks and wealth managers are meanwhile placing greater emphasis on next generation education, family governance and long term succession preparation as wealthy families confront increasingly complex transitions. The high profile Wahaha inheritance dispute in China has also highlighted the risks associated with informal arrangements, unfinished trusts and last minute planning. Experts increasingly warn that modern succession planning is becoming less about tax efficiency alone and more about governance, values and long term family alignment. From London to Hong Kong, courts are increasingly being asked to untangle disputes over trusts, governance and family control as first generation fortunes pass to heirs with very different expectations.
China’s transfer of private wealth is now taking place on a scale never previously seen in the country’s history, with fortunes created during the economic expansion of the past four decades beginning to move to the next generation. Unlike Europe’s older dynastic structures, many of these businesses and fortunes were built by first generation entrepreneurs who remain closely associated with both the wealth and the decision making behind it.
Recent court cases in the UK and Hong Kong have meanwhile provided fascinating reading for private client advisers. The Graham Cheslyn-Curtis Will Trust case in the UK examined the breakdown in relations between trustees and beneficiaries over governance, distributions and involvement in the family business. In Hong Kong, Alfred Ip, Founding Partner at Hugill & Ip, Hong Kong, commented on a separate dispute involving a reported US$2.1 billion fortune, where handwritten notes, informal promises and unfinished trust arrangements became central to litigation between family members.
The cases arrive at a moment when succession planning is under renewed focus globally, not least because so much first generation wealth is now moving into the hands of beneficiaries with very different experiences, expectations and priorities from the founders who created it.
Governance, control and the realities of family wealth
For many advisers, the central issue is no longer simply how wealth is transferred, but whether families are genuinely prepared for what happens after the transfer takes place.
Joshua S. Rubenstein, Partner, Global Chair, Private Wealth Department, Katten, New York said. “Succession planning, and more important, successful implementation of succession planning, is a challenge under the best of circumstances. When one’s estate is liquid, estate shares are easily divisible and beneficiaries can go their separate ways in terms of investments and distributions. But when beneficiaries who don’t always like one another are tied in interest to common assets, such as the family business, it is often a recipe for disaster. This is particularly so in the case of the next expectant generation of ultra high net worth families, who have led such a privileged childhood and young adulthood that they have no meaningful experience in having to compromise. An independent trustee is crucial, and clear guidance and direction from the settlor is crucial. There should be a fair escape mechanism for beneficiaries who want out. While it is every business creator’s dream that his or her business stay in the family for generations, the best gift to one’s family might actually be a direction to sell the business following one’s passing, in order to maximize value and minimize conflict.”
Others argue that the deeper challenge often lies not in wealth itself, but in the expectations, values and governance structures surrounding it.
Savvas Savvides, Senior Partner, Michael Kyprianou, Cyprus said. “In practice, the key challenge in succession is not the transfer of wealth, but the transition of control, expectations, and values. Increased spending by the next generation does not in itself create problems, but misalignment with the founder’s intent and lack of structured governance often does.”
“There is no single ‘gold standard’, but successful trustees tend to follow three core principles: (i) early and continuous engagement with beneficiaries, (ii) clear governance structures and defined decision-making frameworks, and (iii) disciplined communication aligned with the settlor’s wishes.”
“Disputes are not inevitable, but they are common where expectations are unclear or where beneficiaries perceive unequal treatment or lack of transparency. They tend to increase in later generations, where beneficiaries are further removed from the wealth creator and emotional or commercial alignment is weaker.”
“Overall, the most effective approach is proactive: education of the next generation, clear structuring, and managing expectations before conflict arises, rather than reacting to disputes once they crystallise.”
Savvides also noted that succession planning becomes considerably more complicated once multiple jurisdictions and inheritance systems become involved.
“Forced heirship can indeed create complications in Cyprus, particularly in cross-border situations. Under Cypriot law, forced heirship rules restrict the extent to which a person can freely dispose of their estate upon death, by reserving a statutory portion for close family members.”
“However, in practice, the position is more nuanced for international clients. Where an individual is not domiciled in Cyprus, or where EU Regulation 650/2012 (Brussels IV) applies, it is often possible to elect the law of nationality to govern succession. This can effectively bypass Cypriot forced heirship rules, provided the structure is properly set up.”
“The challenges tend to arise where there is a mismatch between the client’s planning, often based on a common law system with full testamentary freedom, and the default application of local rules in Cyprus. Without proper structuring, this can lead to disputes, delays in administration, or outcomes that do not reflect the testator’s intentions.”
“In short, forced heirship does not necessarily create problems but it does require careful cross-border planning to ensure alignment between jurisdictions and to avoid unintended consequences.”
While advisers have long worried about entitlement and family disputes, many now say the newer tensions emerging inside wealthy families are increasingly ideological as well as financial.
Sustainability, philanthropy and changing family values
Alice Killingbeck, Partner, Head of Family Office & Private Client Legal, Private Capital Market Lead, KPMG UK said. “Conflicts between trustees and next generation beneficiaries most frequently arise where expectations are misaligned early on. Clear communication, phased involvement, and well managed education around governance and decision making tend to be more effective than assuming authority will naturally transfer with wealth. From our experience, issues are not inevitable, but they are more likely where beneficiaries feel disengaged or where spending patterns shift sharply without agreed guardrails.”
Killingbeck said advisers are increasingly seeing younger beneficiaries challenge not only spending decisions, but also the underlying values attached to family wealth structures.
“It’s also worth noting that the challenge is not necessarily always higher spending by the next generation. We increasingly see fundamental differences in values and priorities, for example around impact investing, sustainability, and philanthropy, which can create tension where trust structures and investment policies were designed for a different world view. These differences in views can also exist across branches of the same family and between generations. In a recent case we advised Jersey trustees on navigating these differences which ultimately led to sub-funds being established allowing for separate investment approaches.”
“For trustees, navigating these value shifts, while remaining within fiduciary law and duties as well as the settlor’s intentions, presents a distinct and growing challenge. Trust law is slowly catching up; with Bermuda most recently enacting the Trustee Amendment Act 2025 in response to the growing demand for responsible investment strategies to reflect both the financial and non-financial priorities of beneficiaries.”
“The development seeks to protect trustees by allowing them to consider social, environmental and broader impacts alongside financial returns. It will be interesting to see the rate at which other jurisdictions follow suit and enact similar reforms.”
Questions of governance become even more complicated when trustees themselves become part of the conflict. Recent cases have shown how quickly professional disagreements can deteriorate into personal hostility, particularly where family businesses and control structures are involved.
Beating the “rags to rags” curse
Jonathan Burt, partner at Charles Russell Speechlys, said the case offered a wider lesson about governance, succession planning and the importance of maintaining trustee neutrality.
“The great wealth transfer is well underway. An estimated $124 trillion will change hands globally by 2048. The media loves stories about spendthrift heirs burning through inherited fortunes. However one of the main reasons for failure is communication breakdowns within families and a failure to prepare heirs for the future. The Cheslyn-Curtis case illustrates both and has given advisers on trusts and estates pause for thought. Graham Cheslyn-Curtis built the Millpledge veterinary supplies group. He died in 2018, leaving an estate worth £8.2 million. He wrote a detailed letter of wishes asking his trustees to mentor his step-children as they took over the running of the business. However what happened was that relationships collapsed. The step-children lost their directorships with one trustee branding them “entitled, self-interested, complacent, acquisitive and greedy”.
“All too often the letter of wishes, which tells your executors what you have in mind for things such as your possessions, your funeral, and your children’s upbringing, is not only written by a lawyer, it sounds like it has been written by a lawyer and is stored in the Will folder as a one-off memorandum. It should rather be a “living document”, regularly reviewed and updated – and ideally shared and discussed with those whom it concerns.”
“In 2026, the emphasis should be more on partnership and less on paternalism. It is best for trustees and beneficiaries to work together towards the same goal. Where a trust holds a family business, give the next generation responsibility in a well planned manner. This could be advisory roles, co-trusteeship and then leadership.”
Burt said. “We frequently see tension caused by beneficiaries having to rely on the judgement of the trustees. Sometimes they do not like it. The point is whether the parties can manage that tension or let it fester. Things like regular family meetings, transparent reporting on distributions and professional, independent trustees can help. I have seen families rallying around a family constitution because it enables them to identify and agree upon common ground. By the third and fourth generation, a family is larger, more dispersed, more diverse and further from the wealth creator’s values, so they need governance which keeps apace with these developments. One commonly hears about “rags to rags in three generations”, but families who invest in education, shared values and proper trusteeship can beat it.”
Is there a gold standard for trustees dealing with next generation beneficiaries?
Alfred Ip, Founding Partner, Hugill & Ip, Hong Kong said. “If there is a gold standard, it is emotional discipline and rigorous boundary-setting. In Cheslyn-Curtis, the fatal error was not a commercial decision, but a failure of fiduciary detachment. When served with proceedings, Paddy Campbell filed a witness statement describing the beneficiaries as ‘entitled and greedy,’ motivated by ‘deep-rooted greed,’ and focused solely on ‘the acquisition of money and control’. The judge held this constituted ‘outright hostility’.”
Ip said the case highlighted how quickly trustees can lose the confidence of the court once disagreements become personalised.
“The gold standard requires trustees to maintain clinical objectivity, even when provoked. A trustee may legitimately disagree with, or even discipline, a beneficiary in a corporate role. However, the moment a trustee allows a commercial dispute to become a personal verdict on the beneficiary’s character, and commits that verdict to a sworn statement, the fiduciary relationship is, in the eyes of the court, beyond repair.”
“Furthermore, co-trustees must independently evaluate their position; Malcolm Taylor was removed simply because he filed evidence explicitly agreeing with Paddy’s hostile remarks.”
Ip added that many of these disputes ultimately stem from rigid structures colliding with changing family realities.
“Disputes are not inevitable, but they are highly probable when the succession architecture lacks flexibility. In Hong Kong, we frequently see similar dynamics. A founder builds a fortune in manufacturing or property and establishes a trust designed to keep the business intact, often appointing trusted lieutenants as trustees to ‘tutor’ the next generation. If the next generation lacks the aptitude or desire to run the business, or if they clash with the professional management, the structure becomes a pressure cooker.”
“To mitigate this risk, settlors must be counselled toward flexible structures that separate corporate governance from wealth distribution. Annual beneficiary meetings, transparent rationales for distribution decisions, and a standing offer to mediate can prevent grievances from calcifying into litigation.”
Other advisers argue that the underlying problem often begins much earlier, particularly where succession planning is treated primarily as a legal exercise rather than a long-term governance process.
Preparing heirs, not simply transferring assets
Alessia Allegretti, one of the three Founding Partners and Co-Managing Partner at Bois Schiller Flexner, Italy said. “The Graham Cheslyn-Curtis Will Trust is a useful reminder that succession planning is not simply about deciding who receives the assets. It is also about structuring a governance framework capable of preparing the next generation and effectively governing the relationships between ownership, business and wealth.”
Allegretti said many disputes are ultimately rooted in misalignment rather than outright greed.
“In my experience, disputes are rarely caused by one single factor, such as the next generation ‘spending too much’. Spending can certainly become a flashpoint, particularly where beneficiaries have very different attitudes to money from the founder or where distributions are expected to fund a lifestyle that the trust or family business cannot sustainably support.”
“However, the deeper problem is usually a lack of alignment: beneficiaries do not understand the purpose of the structure, trustees do not fully understand the beneficiaries’ expectations, and the founder’s wishes are not translated into a practical governance process.”
“There is no absolute ‘gold standard’, but there are some principles that, in my view, make a significant difference.”
Allegretti said founders should avoid relying too heavily on informal guidance documents without building a proper governance framework around them.
“First, the founder should avoid relying only on a letter of wishes, however thoughtful it may be. A letter of wishes can be very helpful, but it is not a substitute for a clear governance architecture.”
“If the intention is that the next generation will gradually assume responsibility in managing the business and/or the family’s wealth, that process should be designed in advance: what information will they receive, who will mentor them, what milestones must they achieve, and how will disagreements be resolved?”
Allegretti also said trustees increasingly need to see beneficiaries as future stewards rather than passive recipients.
“Second, trustees need to engage with beneficiaries as future stewards, not merely as recipients. This does not mean giving beneficiaries control prematurely, nor does it mean indulging unreasonable requests. It means creating a structured dialogue, with education, transparency and clear boundaries.”
“Beneficiaries are much less likely to become hostile when they understand the rationale behind decisions and feel that they are being treated with respect.”
Allegretti added, as we have heard, that trustee neutrality remains critical once relationships begin to deteriorate.
“Third, the role of the trustee must remain impartial. Once trustees begin to form fixed negative judgments about beneficiaries, whether they see them as entitled, unprepared or irresponsible, it becomes very difficult for the relationship to recover.”
“The trustee’s duty is not to like the beneficiaries, but to administer the trust properly, fairly and in accordance with its purpose. If personal distrust takes over, the structure can become unworkable.”
Allegretti said protectors can sometimes play an important stabilising role inside wealthy families.
“This is also where the role of a protector can be very important. Properly conceived, the protector can help preserve the founder’s intentions, facilitate communication between trustees and beneficiaries, and ensure that the trustees’ decision-making remains aligned with the spirit and purpose of the structure.”
“Ideally, the protector should be someone trusted by the founder, but also known and respected by the beneficiaries. In difficult family situations, this role can be particularly valuable because the protector may provide continuity, institutional memory and a degree of relational balance that purely professional trustees may not always be able to achieve alone.”
She also warned that later generations often become progressively detached from the original story behind the wealth.
“I do not think disputes between beneficiaries are inevitable. They become much more likely where succession planning is treated as a document exercise rather than a human process.”
“The third and fourth generations can be more challenging, not because they are necessarily more difficult as individuals, but because they are often further removed from the wealth creator’s values, sacrifice and original business story. The emotional connection weakens over time, and with it the informal discipline that may have held the family together.”
“For this reason, modern wealth succession should focus as much on continuity of values and decision-making culture as on tax, asset protection and control. A well-drafted structure is essential, but it will not by itself create trust. Trust has to be built before the founder’s death, through communication, education and a realistic plan for transferring authority.”
Allegretti said advisers themselves increasingly need to act as facilitators between generations, rather than focusing solely on technical structuring.
“This is also where advisors have an important role to play. Their contribution should not be limited to technical structuring, tax efficiency or legal drafting. Those elements are essential, but they are not enough.”
“Advisors can help bridge the gaps between generations, identify common ground, articulate shared values, preserve the family history and create initiatives through which different generations can work together.”
“In this sense, advisors can act as facilitators of dialogue, helping the family move from a purely distributive conversation, ‘who gets what’, to a more constructive conversation about purpose, responsibility and continuity.”
“The real lesson is that families should not wait for the ‘great wealth transfer’ to happen and then hope the structure will manage the consequences. The transition needs to be rehearsed, discussed and governed while the senior generation is still able to explain its intentions and help the next generation become credible stewards.”
Preparing the next generation
Many of the themes identified by advisers, including informal arrangements, family distrust and unfinished planning, are now being tested in courts around the world.
Yet not all advisers view succession primarily through the lens of conflict. As the great wealth transfer accelerates globally, particularly in Asia where many fortunes remain first generation and succession structures are still relatively immature, private banks and wealth managers are increasingly finding that successful transitions depend as much on education, communication and long term family engagement as on legal structuring alone.
Many advisers argue that the families most likely to avoid disputes are those that begin preparing the next generation long before any transfer formally takes place.
The role of private banks
Tom Vernon, head of private clients at Sarasin & Partners said. “The most successful inter-generational transitions tend to begin well before assets are formally passed on. In my experience, families that start these conversations early are far better placed to navigate both the practical and emotional complexities of succession.”
“A recurring theme among clients is how to prepare younger family members to engage confidently with inherited wealth. That means helping them understand the family’s assets, the principles behind investment decisions, and what ownership practically involves. Building relationships with trusted advisers early makes future transitions smoother and less daunting for everyone involved.”
“We are also seeing growing demand for structured education, particularly around investment fundamentals, risk, and long-term decision-making. We support families by offering next generation investment training and by working closely with their existing advisers, including IFAs, lawyers and accountants.”
“Ultimately, succession is not purely a technical exercise. It is about confidence, continuity, and shared understanding across generations. Families that invest time in building that foundation early are consistently better prepared, not just financially, but as a cohesive unit with a clear sense of direction and shared values.”
The risks of failing to build those governance structures early are now becoming visible in several major Asian family dynasties, where unfinished planning, informal arrangements and unresolved family dynamics are colliding with enormous concentrations of wealth.
The Wahaha succession battle
Informal promises, unfinished trusts and a US$2.1 billion dispute
A Google search shows a story in the Asia Times of succession gone wrong. Zong Qinghou, who could be called a ‘colourful character’, established Wahaha in 1987, growing it from a small distributor into a national leader in soft drinks, including nutritional milk, bottled water, tea, and fruit juices. Following Zong Qinghou’s death at 78 years, in February 2023, his daughter, Kelly Zong Fuli, took over as chairwoman.
However, in mid-2025, three individuals, Jacky, Jessie and Jerry Zong, claiming to be her half-siblings, surfaced alleging a breach of a family agreement and challenging her control.
A Hong Kong court froze approximately US$1.8 billion in an HSBC Holdings account managed by Kelly Zong due to the inheritance suit, which is expected to become a landmark case for Chinese corporate governance.
A clinical autopsy of a failed succession plan
Of the case Alfred Ip said. “For private client lawyers, the recent Hong Kong Court of First Instance decision in Jacky Zong v Kelly Fuli Zong ([2025] HKCFI 3355) is a clinical autopsy of a failed succession plan. The judgment reveals that the fatal flaw was not merely procrastination, but a profound misjudgement of human nature and family dynamics.”
The architecture of failure
Ip said the case demonstrated the dangers of attempting to construct complex succession structures at the very end of life.
“The court record shows that the entire offshore succession plan was crammed into the final 24 days of Zong Senior’s life. The plaintiffs rely on an undated handwritten note, an ‘entrustment letter’ dated just three weeks before his death, and a post-death ‘Agreement’. There was no settled trust deed, no appointed trustee, and no funded structure.”
“The most striking error, however, was the chosen vehicle. The US$2.1 billion intended for the three trusts was held by a BVI company whose sole shareholder was Kelly Zong, the primary heiress.”
“Zong Senior vested the assets in Kelly and relied on her to implement his wishes posthumously. He expected her to do the ‘right thing’ by funding trusts for a ‘second family’ that competed with her own branch.”
“There could be many reasons for such an arrangement, perhaps a desire to avoid the complexity of formal trust structures, or a belief that his patriarchal authority would compel obedience even from the grave.”
The shift in family dynamics
Ip argued that the dispute reflected a wider reality seen repeatedly in succession battles once the founder dies.
“What Zong Senior probably did not realise is that family dynamics shift fundamentally the moment the patriarch passes away. The gravitational pull that holds competing family branches in check disappears.”
“The informal promises and handwritten notes that seemed sufficient during his lifetime become weapons in a legal battlefield.”
“The predictable result of expecting the primary heiress to voluntarily divest US$2.1 billion to her half-siblings is exactly what the Hong Kong court observed: Kelly refused to sign the trust deeds, insisted on being appointed protector with power to determine the trust period, and the cash began to leak into unrelated capital calls.”
“The plaintiffs were forced to seek a section 21M freezing order in Hong Kong just to preserve the assets pending litigation in Hangzhou.”
The lesson: take advice and follow it
Ip said the dispute ultimately illustrates the limits of informal succession planning once significant wealth and competing interests are involved.
“Founders often avoid formally constituting trusts because it requires transferring legal ownership and relinquishing absolute control to independent professional trustees. They prefer informal arrangements, believing their family will honour their wishes. It rarely works.”
“As the Wahaha saga now proves, informal arrangements cannot survive the rigorous demands of modern trust and probate law.”
“The Wahaha saga is the ultimate proof that expecting heirs to act against their own financial interests based on informal posthumous instructions is an unwise strategy.”
“The critical lesson for any wealth creator is the importance of not only taking professional advice but actually following it. A robust succession plan requires properly constituted inter vivos trusts and independent professional trustees, implemented while the founder still has the capacity to enforce them.”
“Without these, a founder’s legacy is not a smoothly running empire, but a multi-jurisdictional battlefield.”
The snail wins the ‘race’
The emerging disputes surrounding global wealth transfers suggest that succession planning is becoming less about tax structures alone and far more about governance, communication and cultural alignment within families.
Many founders still assume that informal understandings, family loyalty or broad statements of intention will be enough to preserve stability after their deaths. Increasingly, the courts are showing otherwise. Last minute arrangements, unfinished trusts and loosely documented wishes can quickly become sources of litigation once the authority of the founder disappears.
At the same time, generational attitudes towards wealth are changing. Younger beneficiaries may prioritise sustainability, impact investing or philanthropy in ways that differ sharply from the commercial instincts of the founders who built the fortune. These differences do not necessarily create conflict, but they can place significant pressure on trust structures and governance models designed for a different era.
Cross-border wealth adds further complexity. Jurisdictions such as Cyprus, with forced heirship rules sitting alongside international planning structures and large expatriate populations, demonstrate how easily families can become exposed to conflicting legal systems if planning is not properly coordinated.
The common theme running through many of these disputes is not recklessness, but delay. Families often postpone difficult conversations about governance, authority and succession until a health crisis or death forces decisions to be made quickly.
In wealth succession, the slow and deliberate approach usually proves more durable than the hurried solution assembled at the last moment.
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