“The parent who leaves his son enormous wealth generally deadens the talents and energies of the son, and tempts him to lead a less useful and less worthy life than he otherwise would.”

- Andrew Carnegie

The Challenges Associated With Wealth

Families that have earned, sustained, or accumulated substantial wealth face significant challenges in their lives. The maintenance of significant wealth requires diligent oversight and stable guidance. Under the wrong supervision, wealth that has been in a family for generations, can dissipate quickly.

The successful transition of wealth from one generation to the next, particularly from the second to the third generations, is most often not a question of proper financial asset management, but much more about the development of the succeeding generations family members. It is important that the family members have a solid understanding of their role in the families long term stability and success.

The Odds Are Stacked Against Most Families

The old term “shirtsleeves to shirtsleeves in three generations” occurs much more often than not in the United States today. In the book Philanthropy, Heirs and Values, A study of 3,250 wealthy families was conducted and it was found that more than 70% of wealthy families fail to successfully transfer wealth from one generation to the next. The main reason for this failure was not a breakdown in investment management, legal, or tax planning. The main issue was that succeeding generations of family members were ill prepared to handle the effects of massive wealth. Most of the attention went to the investment management side of wealth sustainability, but little consideration was given to the human capital aspect of wealth sustainability.

How We Can Help

Elysien Private Wealth can work with your family on your family governance program; including building a effective plan for family principles, policies, and practices. We can help you establish a family constitution, trust distribution guidelines, family business best practices, expectations for family involvement, and family wealth education programs. We will combine these efforts with our investment management expertise and coordinate our efforts with your other trusted family advisors.

Our family governance platform can help the current and future generations of your family be better prepared to handle the effects of wealth and help them develop the level of maturity needed in order to deal with those effects responsibly.