Succession · 6 minute read
The second generation is rarely the problem
When family wealth fades, people tend to blame the heirs. More often, the real cause was set in place long before they inherited anything.
There is an old saying in many languages about wealth disappearing by the third generation. The Dutch version speaks of the grandfather who earns it, the son who keeps it and the grandson who spends it. It is a tidy story, and it places the blame on the young.
In our experience the story is usually unfair. Families rarely lose their footing because the next generation is careless. They lose it because nobody explained how decisions were made, what the capital was for, or who was expected to take responsibility when the founder stepped back.
A founder often carries the whole structure in their head. They know why a holding sits in a particular country, why a property was never sold, why one advisor is trusted and another is not. When that knowledge is never written down or shared, the next generation inherits assets without inheriting understanding.
The practical answer is not complicated, although it takes patience. Bring the next generation into conversations early, long before any transfer. Let them sit in on meetings and ask questions. Write down the reasoning behind important decisions, not only the decisions themselves. And agree in advance how disagreements will be settled, because they will arise.
Families who do this well tend to describe it in the same way. The wealth stops being something one person holds and becomes something the family looks after together. That shift, more than any investment decision, is what lets capital last.
This essay is general commentary and not investment, legal or tax advice.