Andrew Carnegie is credited with the most infamous and requoted aphorism in family business. “Three generations from shirtsleeves to shirtsleeves” refers to the commonly held belief that in the lifecycle of family business empires, the third generation is where it all goes wrong.
Increasing life expectancies have meant that for the first time in history, four generations are alive at the same time. This has important implications for the timing of the transition of family wealth.
There is an ‘inheritance boom’ coming when the Millennial generation inherit the wealth of the Baby Boomer generation, but this is expected to peak in 2035 when the average Millennial has already passed the age of 60!
Some wealth originators shudder at the idea of passing over the reins while they are still alive, having seen other children squander their family’s wealth. While there is always a risk that the next generation will blow it, the previous generation can reasonably argue that they don’t want to be around if/when that happens.
But is it reasonable to make the next generation wait that long? Granted, they will likely have many years to enjoy the wealth (and the control of the wealth), but holding back can create resentment and can be considered condescending and patronising.
Consider This: At what age do you think your children should inherit significant family assets? To what extent is that driven by your own experience? Whatever the age, what are you doing to prepare them for that eventuality?
Original articles: https://www.moneywise.co.uk/news/2018-01-02/millennials-set-inheritance-boom-when-they-turn-61 https://www.tharawat-magazine.com/facts/third-generation-failure-family-business/
Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Familosophy newsletter: www.transitionbook.co/member-area/
#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #successionplanning #workfromhome #governance #leadershipdevelopment #familybusiness #entrepreneurship