How to Prepare and Train Heirs to Take Over the Family Office.

Family Office Heirs being taught

People who have managed to achieve a considerable amount of wealth recognize that preserving family money beyond a few generations is not an easy task. So much so, in fact, that statistics back up this narrative; studies have found that 70% of the time, family assets are lost from one generation to the next, and assets are gone 90% of the time by the third generation. The prospects of transferring considerable wealth and power to children and grandchildren generate concern for many heads of family offices. This is why today we will go over how family offices can train and prepare their heirs to deal with their inherited wealth and responsibility in a more productive and socially conscious manner.

But before we jump to a conclusion, let’s first understand the issue behind the loss of capital among generations. It mainly happens because of a crucial element of a successful inheritance, that is more often than not, very neglected and overlooked. What we generally see is that the focus is on the current heads of family offices, which are the givers of wealth. Still, it should rather be on the receiver’s side by preparing them to manage the family office as well as the family business, because, according to the psychologist and certified financial planner Brad Klontz, giving such wealth and power to unprepared hands is fraught with danger.

A far better approach to wealth preservation and inheritance would be to outline a heritage design that aims to help family offices better communicate their values and traditions and how they want the heritage to be managed. To put it into simpler terms, instead of having an attorney write up a complex and, most of the time, overlooked set of instructions, the heirs should rely on a set of pre-inheritance experiences that were ideally shared over a lifetime between the older and younger generations. For example, the family could gather every couple of weeks to reinforce its values and traditions and to teach the heirs how to handle the wealth and power that they stand to inherit. Some people may also lean towards writing a letter where they can tell a story of how the family empire came to be established.

By doing this, families will not only ensure that their heirs are being set up to succeed but they will also be building a sense of leadership and a set of powerful analytical skills that will surely come in handy when managing the family office and preserving the family’s wealth. Remember, a lot of folks spend their whole lives accumulating significant wealth, but unless they take the much-needed time to prepare their heirs to properly inherit it, much, if not all of that effort could potentially go to waste.


Are you running a family office? At the Global Investment Leaders Club we conduct regular gatherings for the heads of the family offices dedicated to different topics: from establishing fruitful relationships with like-minded Family Offices, discussing how to better act on the present shift of capital, sharing trend projections for the upcoming years and sharing effective solutions on how to better handle the transition to the next gen. To check out when you can attend the soonest one by visiting our “register for events” section.