You’ve worked hard to get where you are. You’ve built your wealth over time and now you want to ensure it will last for future generations. You already know how difficult creating wealth is, but you may just be realizing that preserving it comes with its own unique set of challenges: you want to know the money isn’t going to run out. Hence don’t have any gaps in your wealth management strategy. You will be able to comfortably fund your lifestyle and evolving goals. So, you have a solid estate and business succession plan.

Family Wealth Is Not Self-Perpetuating

Regardless of culture, the global tendency is for family wealth to become depleted after about three generations, and often after two or even one.

A study by The Williams Group of 2,500 wealth transitioned families over 20 years found that 70% of families lose control of their assets and family harmony within one to three generations following the wealth transfer. This was true for families with both owned and sold businesses.

The typical family wealth lifecycle is as follows:

>>Generation 1: Wealth Creation

>> Generation 2: Wealth Consumption

>> Generation 3: Wealth Depletion.

The top reason study participants gave for wealth transition failure was a breakdown of trust and communication. Other factors included a failure to adequately prepare heirs and a lack of family mission statement.

“Preservation of long‐term family wealth is a question of human behavior.”

  • James E. Hughes Jr.

What Factors Cause Successful Family Wealth Transitions?

If family wealth is such a challenge to maintain, what are the factors associated with a successful wealth transition to children and grandchildren?

  1. Total Family Involvement:
    • Both spouses and bloodline.
    • Can be challenging and time-consuming BUT avoids ‘Mom and Dad’ dictating ‘the future.
    • Ensures buy‐in from future generations.


  1. A Process that Integrates What the Family Members Learn Together:
    • Decisions made by the entire family (before parental/G1 death) require that all the elements of the family wealth succession plan be addressed.
    • Needs to be included in a family governing document; i.e. Family Wealth/Office Charter.
    • The family governance process will identify competencies and roles to fulfill family aspirations, hold members accountable, and keep everyone ‘on target’.


  1. Learning and Practicing Skills in the Areas of:
    • Communication
    • Openness
    • Trust
    • Accountability
    • Team consensus building.
    • Articulating and sharing values.
    • Unifying behind a common mission.

How to Create Sustainable Wealth

When you commit to developing the factors mentioned above, you will be well on your way toward family wealth preservation.

You must work with a wealth management professional, such as an outsourced Chief Investment Officer (CIO), who will help your family identify their needs and goals, their approach to risk, and their succession strategy. Once your advisor confidently understands your needs, they can build a custom portfolio. That matches your goals and your timelines – and most importantly, that is sustainable.

At Capital World, we also form a Family Stewardship Council for all of your professional advisors to come together and ensure there are no oversights in your overall wealth strategies.

It’s simple: sustainability requires wealth preservation and responsible growth over the long term.

With the right professionals by your side and a dedication to developing familial trust and unity, you can successfully preserve your wealth for generations to come.


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