The Squirrel Strategy

Why the Ultra-Wealthy Don’t Just "Leave a Will"

Introduction

Squirrels are the forest’s most underrated financial planners. They don’t just eat for today; they prepare for a winter they know is coming. By burying up to 10,000 nuts in various locations, they ensure that even if a few spots are raided by a rival or forgotten, the family survives.

Most of us start out like these squirrels. We save our surpluses in bank accounts, stocks, or a family home. We keep the "accounting" in our heads or perhaps on a simple spreadsheet, occasionally asking a spouse or a part-time bookkeeper to help keep things tidy. When wealth is modest, the goal is simple: growth.

But as wealth grows into a "forest," the stakes change. Suddenly, the goal isn't just growth—it’s preservation and legacy. For those with significant assets, a simple Will is often not enough to keep the "winter" at bay.

The Problem with the "Simple Will"

A Will is a set of instructions to be enforced after you are gone. But once the assets are handed over, the control is gone too.

The Real-Life Risk: Imagine a successful entrepreneur, Mr. Tan, who leaves RM10 million in cash and a thriving factory to his three children via a Will. One child wants to sell the factory to buy a yacht; the second is going through a messy divorce; the third is too young to handle the money. Within five years, the "nuts" are gone, and the family business—the tree that grew the nuts—is chopped down. To avoid this, the wealthy turn to a more professionalized system: The Family Office.

What exactly is a Family Office?

Think of a Family Office not as a physical room, but as a Private Wealth Command Center. In the early days, you managed your own money. As you become more successful, you hire a "Chief Financial Officer" for your family. A Family Office is a dedicated team of professionals (lawyers, accountants, and investment experts) whose only job is to manage, grow, and protect one family’s empire. It moves wealth management from "DIY" to "Institutional." This system uses two primary "safes" to hold the family’s nuts: Trusts and Foundations.

The Trust: The "Legal Handshake"

A common misconception is that a Trust is just a stack of papers. In reality, a Trust is a legal relationship. Imagine you want to give a gift to your grandson, but he is only five years old. You give the gift to a wise friend (the Trustee) to hold onto and use only for the boy’s education until he turns 25. That is a Trust. The benefit is that the assets are no longer in your name, which protects them from creditors or lawsuits. The reality is that a Trust is not a "person" or a "company." It cannot be sued directly; instead, the Trustee acts on its behalf.

Foundation: The "Private Entity"

While a Trust is a relationship, a Foundation is more like a company. It is a separate legal "person" that can own property and enter into contracts. However, unlike a company, it has no shareholders. No one "owns" a Foundation; it exists to fulfill a specific purpose set out by its founder. In Southeast Asia, many families use a Labuan Foundation. Think of it as a "family bucket" registered with the authorities. The family creates a Family Charter—a "rule book" that dictates how the money is spent. For example, the Charter might say: "The Foundation will pay for the university education of any descendant, provided they maintain a certain GPA."

Some may ask what is the difference between a Single Family Office and a Multi-Family Office? The answer depends on which families are being served. In a SFO, the services are dedicated to one family (think the Rockefellers or modern tech billionaires). Incidentally, the Forest City Family Office tax incentive was only offered to SFOs, aiming to turn the region into a hub for these private wealth hubs. On the other hand, Multi-Family Office (MFO) are like a "shared" command center where one professional team manages the wealth of several different families, making it more cost-effective.

Conclusion

Building a Forest, Not Just a Cache

The goal of using Family Offices, Trusts, and Foundations isn't just to hide money away.

It is to ensure that the wealth you worked a lifetime to build doesn't vanish in a single generation. By moving from "keeping it in your head" to a professionalized structure, you aren't just squirreling away nuts—you are planting a forest that will feed your family for generations to come.