Aug 1, 2010 12:00 PM

The online challenge of monitoring and protecting a family's good name

By Michelle Jordan & Patricia M. Soldano

Ripped from the headlines: “CEO Faces $7 Million Judgment After Son's Driving Conviction” in The Financial News Daily; “Businesswoman Fires Nanny, Gets Slapped With Age Discrimination Suit” (for $4 million) in The Financial Herald. Both chilling stories tell tales of affluent families, unchecked behavior, poor judgment and issues ignored until they erupted into bank-breaking lawsuits costing millions of dollars and spelling financial ruin. Both of the above are fictitious. They're part of an arresting ad campaign for a national insurance company selling personal and property risk insurance to high-net-worth clients. In bold type, the ad asks, “When you see what's happening today, do you see your clients in the picture?” The ad goes on to talk about risk management and the need for protection against the kind of financial catastrophe outlined in the real-life type headline.

The ad makes a good point about the importance of financial protection, but it also raises a question that's not addressed at all. That is the devastating, life-changing impact such situations can have on a hard-earned reputation and the good name of the family involved. Warren Buffett is quoted as saying, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” Once-lauded public figures who may wish they had done it differently abound — from Tyco's plundering CEO Dennis Kozlowski, to Martha Stewart and her insider trading scandal; from former Illinois governor Rod Blagojevich's alleged attempt to sell a Senate seat, to South Carolina governor Mark Sanford's salacious affair; from cycling champ Floyd Landis' admittance of steroid use, to Tiger Woods' admittance of serial infidelity.

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

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