Families who successfully navigate the complexity of wealth through multiple generations tend to do things differently. They recognize the need to establish a framework for decision-making that includes creating foundational documents—also viewed as the “Cornerstone Statement”—that feature their values, vision, and mission for the wealth over many generations. With focused planning and respectful collaboration, you can learn how to create these foundational documents to help your family and future generations achieve a long-lasting and thriving legacy.
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Taking cues from entrepreneurs, families with great financial wealth would be well-served to create environments where their children can fail and in doing so, learn the invaluable lessons about finance and resilience. While the older generations may set the tone by sharing their own stories about overcoming adversity, the rising generations will learn best by making their own mistakes.
Research indicates that multigenerational involvement is the single most important factor in sustaining family wealth into the third generation and beyond. Furthermore, the families that most successfully integrate younger members into their family operations seem to share the same philosophies and core values. It’s a family enterprise mindset that prepares the rising generation to be able to step in immediately and manage the family’s financial assets, run the enterprises, and preserve the culture and legacy.
One of the most common concerns families have revolves around how to share wealth with family members without encouraging entitlement. With forethought and care, giving well and wisely can bring families together and strengthen the bonds between generations. The steps to giving wisely—and fostering flourishing over entitlement—include clarifying your intentions, understanding your recipients, communicating more rather than less, and letting go of what you cannot control.
At the start of a family enterprise journey, there is often a patriarch (or matriarch) who was both an entrepreneur and a leader who overcame uncertainty or adversity to create something very special with the potential to last for many generations. For the families seeking to sustain their legacies, there will come a time for the patriarchs to move forward to the next phase of life—preparing for the generational transition. However, it will require a different mindset and form of leadership.
Like many families, you may be involved in running businesses or other types of investments together with other family members, but is this necessarily the right choice? Should you consider breaking away and creating your own path. The decision on whether to stick together or unbundle collective assets into separate ownership and investment structures will perhaps be one of the most difficult decisions a family will ever confront. There are advantages and disadvantages to both.
While each family office has its own unique makeup and course to success, there are many recurring themes over the years which, when aggregated, form something of a roadmap which can be used to help guide other families on their own unique journeys—be they new to wealth or several generations deep. Against that backdrop, this eBook brings collective insights and experiences to help families achieve successful intergenerational wealth transfers.