Wealth rarely fails for lack of investment skill; it fails for lack of preparation. Thoughts on stewardship, communication and raising capable inheritors.
The old proverb about wealth failing to survive three generations is repeated so often because it so often proves true. In our experience, when it does, the cause is rarely poor investment returns. It is the absence of preparation: heirs who inherit assets without inheriting understanding.
Family governance is the deliberate effort to pass on both. It can be as formal as a family constitution and regular family meetings, or as simple as including adult children in an annual conversation with the family's advisors. The form matters less than the habit.
Several practices serve families well. Talking about money openly, at an age-appropriate level, long before any transfer takes place. Giving the next generation genuine responsibility — a charitable fund to direct, a small portfolio to oversee — while mistakes are still affordable. Writing down not only what the family owns, but what the family is for: the values and purposes the wealth is meant to serve.
We are privileged to sit alongside families in these conversations. They are seldom about spreadsheets. They are about identity, responsibility and trust — and they are, in the long run, the most valuable planning work a family can do.