If you were able to create some wealth through the family business, how do you keep it going in future generations? It seems as though very few families are able to successfully keep the wealth going strong.
Only the big family names (think “Rockefeller”) lead us to believe that family wealth is perpetual. In reality, family wealth left unchecked has a tendency to follow the law of entropy as it devolves into chaos and greater and greater breakdown or division. This phenomenon, along with some constructive advice, is featured in a two-part Forbes article titled “How The Wealthiest Families Make And Lose Their Money.”
The article offers a solid point about the power of solidarity. The family that sticks together stays together, and so it is with the family business and the family wealth. As a whole, the family assets get a single voice, a larger capacity, and even attract the attention of professional management. Absent that solidarity, the basic estate laws can effectively and efficiently work to pull apart the assets, the business, and potentially the family’s financial health.
As you read the original article, think about your own family assets. How do you want to pass along your family wealth, whether you have a little or a lot?
Reference: Forbes (February 5, 2014) “How The Wealthiest Families Make And Lose Their Money”