The Multigenerational Wealth Planning: The Vanderbilts

By Trust & Will 

The Vanderbilts 

Many cultures around the world have agades about how a family can go from rags to riches, and then from riches back to rags, within three generations. These axioms are backed by data as well. According to Nasdaq, 70 percent of families lose their wealth in the second generation, and 90 percent lose their wealth by the third generation. While the Rockefellers managed to resist this outcome, the Vanderbilts live to tell a cautionary tale.  

How It Started 

The Vanderbilts have been heralded as ‘American Royalty,’ and as the icons of the Gilded Age. This rich history all started with Cornelius Vanderbilt, who began to amass the family fortune from railroads and shipping businesses in the late 1800s. He became the wealthiest person in America in the 1860s, and went on to pass that title down to his son, William Henry Vanderbilt. The latter was the wealthiest American during the 1870s and 1880s. 

Another notable Vanderbilt is Gloria, granddaughter of Cornelius. Although she had inherited a large fortune, it had already begun to erode. Her father had a gambling habit and had squandered most of his fortune. Gestrude’s mother also risked spending the inheritance through frequent international travel. Gloria herself would go on to have four sons, each from different marriages. One of her sons is prominent in American society today and may surprise you when we reveal their identity shortly. 

How It’s Going 

Notable descendants of the Vanderbilt estate include the 12th Duke of Marlborough, screenwriter James Vanderbilt, and actor Timothy Olyphant. 

By the time of Gloria Vanderbilt’s passing, her estate had dwindled from $200 million to $1.5 million. Her New York apartment was bestowed to her son Leopold Stokowski, while two of her other sons remained estranged. Only one of her four sons inherited the majority of the estate, who is none other than esteemed broadcast journalist and author, Anderson Cooper. 

Cooper, however, takes a strong stance against passing on family fortuners. He never planned on inheriting money from his mother Gloria, and went on to earn a reported $11 million annually through his CNN gig on his own. “I don’t believe in passing on huge amounts of money,” Cooper stated in an interview.  

Now a father, Cooper only plans to pay for his son’s college education. Past that, he expects for his son to build wealth on his own.  

The Vanderbilt Estate Plan  

The Vanderbilt family legacy was riddled with familial discord, gambling, alcoholism, affairs, and even the tragedy of suicide. Once known for lavish spending and philanthropy, the Vanderbilt fortune was squandered for the most part by the mid-20th century. It’s even said that one of Cornelius’ grandsons passed away in a state of poverty. Today, none of the Vanderbilt-founded companies remain within the family.  

To be clear, the Vanderbilt fortune is not entirely gone. However, it was depleted profoundly in a matter of a few generations. Some generous family trusts remain, and several Vanderbilt descendents remain well-off. However, the Vanderbilts portray a telling story of what can happen to a family fortune when it lacks a strong estate plan.  

Perhaps it was this long history of misfortune that turned Anderson Cooper off from the idea of passing down wealth.