Interest by the media and Wall Street in the life and drama of billionaire Sumner Redstone is not unusual as once again an aging billionaire makes the news as his personal life and wealth come under study.
Sumner Redstone, the chairman of CBS and Viacom Media, resigned recently among reports of ailing health and incompetency charged by an ex-mistress. Falling stock prices soon followed.
Redstone owns 80% of National Amusements, through which he still has a controlling stake in both CBS and Viacom. His daughter owns the other 20%.
After he passes away, Redstone’s shares are to be put in trust for his grandchildren. That has led to controversy as the new chairman of Viacom is also one of the trustees. Redstone’s daughter claims this is a conflict of interest.
As reported by the New York Times in “When Family Fortunes Beget Vicious Power Struggles” this is not the first time a feud over a family-owned business has been made public when the founder begins to age or passes away. It is actually fairly common when the founder has done little to pave the way for a successor to operate the businesses and instead holds onto control for too long.
The saga over Redstone’s media empire is just beginning and it might still work out. However, it should be considered as a lesson for anyone who owns a family business. It is extremely important to have a solid succession plan in place as part of an estate plan and that succession plan should be developed over a period of many years.
An estate planning attorney can help set up a smooth transition of power.