Every family business is unique, from their sources of wealth to the dynamics between members. Nonetheless, a few common themes have emerged among families who maintain long-term wealth and harmony.

Shared Purpose. In many cases, family wealth is created by an entrepreneur building a business that becomes a central part of their life and purpose. Cultivating a shared purpose of growing that business with the succeeding generations is an effective way to transfer wealth. However, aligning the needs of the business with the skill sets of family members can be challenging. It is important to recognize that there are other paths for families to carry out their shared purpose and grow their wealth beyond the original business.

For families that have either sold their business or acquired wealth in a different way, finding a shared purpose becomes even more critical. This shared purpose can be built around a family foundation, a common philanthropic initiative, or even a piece of property, such as a family farm or vacation home. The important piece is that the family has a reason to come together repeatedly, and each member feels like they are part of something greater than themselves.

Intentionality. Family enterprises that last for generations are intentional about their wealth. They recognize the responsibility of being good stewards of their resources and understand that transferring their core values to their children and grandchildren is key to achieving family success.

Intentionality also shows up in the way families structure a team of reliable and trustworthy partners. Building a team of advisors who work collaboratively for the benefit of the family enterprise is essential. This team can look different for each family, but some common members are a wealth manager, an estate planning attorney, and a certified public accountant (CPA). It is extremely important for families to choose a team where all members have extensive experience serving families with generational wealth.

Communication. As with any successful relationship, great communication is a key component of success. Family wealth and money in general can be challenging topics to discuss. Successful families foster an environment where each family member understands that they are a part of a common goal or mission and feel empowered to share their ideas and concerns. Prioritizing financial literacy and being mindful of communication styles across generations helps ensure that discussions remain clear and effective, and encourages family members to share their perspectives comfortably.

Although family wealth can certainly be a blessing, it comes with a great deal of responsibility. Having a shared purpose, being intentional, and communicating effectively are three hallmarks of families who feel secure and are empowered by the opportunities of their wealth.

Author Information:

Jason M. Katz, CPA, CFP^®, CEPA^®

Wealth Advisor | Principal

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