Andrew Getty Dies: Dynastic Planning Dream or Disaster?
Another death under dubious circumstances casts unwelcome light on the $5 billion family’s failure to keep multiple generations of heirs out of trouble. Your best clients should view the House of Getty as a cautionary tale and not something to imitate.
A legendary name and a share in the family fortune weren’t enough to keep Andrew Getty from being found dead in the bathroom before his 48th birthday.
He had no known children and kept a low profile. The girlfriend who called the authorities had apparently just been served a restraining order to keep out of his life.
Now that he’s gone, the Getty family tree has lost another potential branch. Maybe that’s the way Andrew’s oil baron grandfather would have wanted it, but it’s probably not an outcome your dynasty-minded clients care to contemplate.
Another sad story
Andrew’s death leaves remarkably few chances for the Getty name to propagate.
Only a few of J. Paul Getty’s grandchildren have reproduced. Most of the next generation can be found in the bloodlines that the family patriarch himself all but disowned when he was alive.
Of course it’s always possible that the threat of kidnapping has kept a whole lot of Getty heirs out of the public record, but given the number of great-grandkids we know about, it’s actually a little unlikely.
What we have instead boils down to a lot of very wealthy middle-aged people who have never had to work a day in their lives and who have on the whole made very little impact on the world otherwise.
When they’re gone, their share of the family wealth will probably roll back into the family trusts and concentrate in the nieces and nephews who remain.
Maybe the kids are ambitious. It’s hard to say. If not, the Getty dynasty’s legacy will eventually roll up into a vast amount of money with as yet no clear relevance to the future.
That’s a sad thing for any would-be dynasty builder to contemplate. Getty buried two of his children, effectively cut two others off and resigned himself to letting the last communicate his commandments from beyond the grave.
I hope Andrew isn’t representative of his cousins in the next generation. Maybe they’re all extremely productive members of society, using their money to fly beneath the radar like angels.
As far as we know, he only had one niece. Older brother Gordon Peter Getty dropped out of business to write songs and blog about the environment. Brother Billy runs a restaurant and shows up in the society columns. Natural sisters Nicolette, Kendalle and Alexandra are wild cards, raised outside the family.
Supposedly the girlfriend who found the body was after his share of the family fortune. Now the money needs to split fewer ways. Unless there’s a baby boom, the split gets even narrower in a few decades.
We don’t know anything about what Andrew did with his piece of the trust fund. Maybe he had world-changing plans. If so, I hope the family picks up the pieces and makes them happen.
Was he raised to live up to the responsibility of his share of the $5 billion Getty name? Was he simply living a billionaire grandson lifestyle, having a good time or simply coasting?
These are questions that only the people who set up the trust fund in the first place can answer. Your clients with truly dynastic wealth need to answer them to their own satisfaction the next time they review their estate plans.
If the grantors are happy letting the kids cash the checks with no strings attached, that’s up to them to decide. But if they want the next generation to meet a stricter standard, the grading scale needs to be spelled out.
Dynastic planners really earn their fees by setting up systems that train the heirs to live up to the family ethos. For grantors that value ambition and work ethic, the trust can force the kids to work for their living expenses.
When the grantor is emotionally invested in a family business, family “succession planning” becomes a key consideration entwined with the corporate succession. Someone will need to take over key roles when the incumbents retire or die. The heirs need to be groomed for the responsibility.
And if the family fails despite everyone’s best efforts, the grantor needs a Plan B to make sure the money moves in directions that would make him or her happy, whether the ultimate beneficiaries are related by blood or not.
A planner who can walk a wealthy client through this process is worth the basis points. At $5 billion, the basis points add up fast.
“Family” versus its members
J. Paul Getty himself opted for Plan B for his personal wealth but he was helpless to direct the fortune that he himself inherited.
His father didn’t trust him, so all the equity in what was once a relatively modest oil company went into a trust to make sure the heirs couldn’t spend everything away for at least two generations.
Getty sued to get the shares and lost. As a result, his personal wealth went to fund his philanthropic interests when he died and Getty Oil — now a multi-billion-dollar entity — stayed in the trust.
The real problems started when Getty vetoed son after son to succeed him as trustee. Divorce, cancer, drugs and suicide left him with Gordon, who never seemed cut out to run a global empire when he could write music and throw lavish parties instead.
Since the family fortune remained in the trust and the shares didn’t pay a dividend, there wasn’t much of an income stream to share amount the beneficiaries until Gordon sold the company and split the trust among his surviving brothers and their kids.
Now each of the four branches of the family is drawing an income. They live relatively modestly. All in all, the Getty dynasty is maybe $1 billion richer today than it was when Gordon sold the company 30 years ago.
J. Paul Getty may not have wanted to see the family brand buried within first Texaco and then Chevron, but then again, he didn’t want Gordon to succeed him either.
Now the grandkids and great-grandkids seem scattered. Some are performing good works or making good art. Others are hard to figure out.
Four decades from now, is that the kind of legacy your top clients want? Ask them the question. Work with them to get a better outcome. Make your mark on a dynasty that lasts.
