One Family’s Emergency Succession Plan

One of the presumed advantages of setting up a single family office is the possibility of forging lasting relationships with staff members, who will get to know the family and may stay for decades. But a single family office isn’t the only way to ensure continuity: Deep, trusting relationships between a family and a family office leader can happen in a multifamily office as well.

Tom E. Sween, Chairman, E.A. Sween Company

Tom Sween, chairman of E.A. Sween Company, and his family have discovered this in their relationship with the multifamily office Cresset Capital and Jim Robbins (executive managing director) and Anne Novak (managing director and vice president of Cresset Trust Company). Sween and his family were longtime clients of Meristem Family Wealth, where Robbins and Novak worked before the firm’s merger with Cresset Capital in 2022.

Robbins, Novak and Cresset Trust Company also play a prominent role in the Sweens’ emergency succession plan for the family business: If something were to happen to both Sween and his son (also named Tom), Robbins, Novak and Cresset Trust Company would take an active role advising the family and the board on the business’s future. To make sure their Cresset team has the knowledge needed to do this, Robbins sits in on board meetings.

“I understand all the challenges and opportunities. I know the board members personally. It’s very smart, proactive thinking and planning by Tom to have something like this in place,” Robbins says. “If something happened to the two key people, they want to keep the business functioning – keep the spirit of what they have been building going forward. Our role would be to come in to work with the board and help guide the board in whatever direction the company needed to go.”

- Advertisement -

A long history

The Sween family’s relationship with Cresset has evolved over time. They started as Meristem clients almost 15 years ago, where they received investment advisory and wealth planning services.

Image by Cassidy Reed

“We have a fairly extensive estate plan that has been modified and evolved over the years,” Sween says. “As I started to step away from the business, it struck me that if something were to happen to Tom – my son who now runs the business and owns the majority of it – what would we do?”

For many years, the emergency succession plan for the family business involved having a board member step in as trustee. But when that plan was put in place, the board’s independent members tended to serve indefinitely. When the company decided to institute fixed terms and have members rotate off the board, the situation changed.

“That created a challenge for us with the trustees and the continuity,” Sween says.

They decided to enlist a corporate trustee with another firm, but later transitioned to Meristem when it established its own trust company, now known as Cresset Trust Company.

“We were just so embedded with them – their family office, the quarterbacking of all of our investment strategies, estate planning, insurance,” Sween says. “They’re independent and unbiased.”

Ultimately, Cresset Trust Company could fill the role of trustee, with Robbins attending board meetings to get to know the business and the players.

“Jim is not a board member. He attends the meetings, and he can contribute, but he doesn’t have a vote or the fiduciary responsibility of a board member,” Sween says. “It gives me some comfort to know that he knows what’s going on, should something take Tom and me out together.”

Image by Cassidy Reed

Working with the family and family office

In addition to having Robbins participate in board meetings and play a key advisory role to the board if the business loses the two key family members who have managed it, the Cresset team interacts with the Sween family in a number of other ways:

  • Cresset’s trust company serves as trustee or successor trustee for many of the family’s trusts (in addition to the one that owns the family business).
  • Cresset advises the family on their investment strategy, including asset allocation, strategy implementation and monitoring and reporting of their financial assets.
  • The Cresset team helps Sween family members with their own financial planning, including where their ownership of the company fits in. They also help family members with legacy and estate planning, as well as trusts for next-generation family members.
  • Cresset offers the family advice in a wide range of areas, helping evaluate insurance proposals, for example, and recommending an estate planning law firm when their estate attorney retired.

Benefits of a close MFO relationship

Both Sween and Robbins see the benefits of having the Sweens’ multifamily office partner play a key role in the business’s emergency succession plan.

“It’s not a big institution that is very foreign and has a lot of turnover. We are technically an independent corporate trustee. But they know us, and we know them. I’ve known the family for a long time,” Robbins says. “So, the idea is, they’re not handing the reins off to some large corporate trustee where they don’t have a personal relationship. With the benefit of sitting in on all the board meetings and being plugged in, we would be coming from a place of experience, interaction and knowledge – versus just completely cold.” 

The structure gives Sween peace of mind — even though everyone involved acknowledges that it’s unlikely the emergency succession plan would ever be needed.

“The whole thing is something you hope you never have to use – it’s like insurance,” Sween says.

About the Author

Margaret Steen

Margaret Steen is the editor of FO Pro, The Family Office Professional. Based in Silicon Valley, she has written for Family Business Magazine for more than 15 years.


Related Articles

FAMILY OFFICE + FAMILY BUSINESS

Sign up for FO PRO: The Family Office Professional. FO PRO connects family office leadership with the family.