By Greg E. Custer, CTFA, TEP
Executive Vice President, Whittier Trust
After more than 30 years of working closely with ultra-high-net-worth families, I’ve seen firsthand how challenging—and often messy—the process of transitioning wealth can be. So many families go into it thinking that a simple will or trust will be enough, only to find that things don’t go as smoothly as they’d hoped. In fact, a significant number of wealth transfers fail to meet expectations, leaving heirs unprepared, creating family disputes, and sometimes even eroding relationships that took generations to build.
So, what’s going wrong? It often boils down to one key thing: communication.
Success is based on the importance of clear communication about wealth transfer plans. Many heirs are uninformed about their family’s estate plans, which can cause conflict over personal and financial assets. A helpful preparation tool is providing a high-level overview of the estate, rather than specific amounts. It is also important to understand that personal items may carry sentimental value, leading to disputes that have little to do with their monetary worth. To mitigate these issues, a suggestion is to create detailed lists of personal property or, if necessary, selling contentious items at auction to preserve family relationships.
For families with a business, the conversation about succession planning gets even more complicated. It’s one thing to talk about passing on wealth, but what about the family business? Who’s going to run it, and how will that affect the family dynamics? Clarity is critical here. Everyone should know what the plans are for the business, what role each family member will play (if any), and how non-managing relatives will be involved. If tensions arise over who should manage the business, sometimes the best solution is to hire an experienced, non-family professional to help keep things running smoothly and preserve the business’s value. One tool that’s proven effective is holding regular family meetings, sometimes called family councils. These structured conversations can help keep everyone in the loop and prevent misunderstandings. They also provide an opportunity for family members to voice concerns, ask questions, and feel engaged in the process.
Another area where families often go wrong is in selecting a successor trustee. Many people automatically assume the surviving spouse is the right person for the job. But in reality, if the spouse isn’t experienced in managing complex estates, it can lead to mismanagement and even strain relationships within the family. This is especially true in blended families, where there may be competing interests. In cases of such wealth it’s always best to appoint a neutral third-party fiduciary—someone who doesn’t have a personal stake in the family drama and is experienced in these matters—to ensure that assets are managed properly and fairly. This is where a well-structured family office can be a real game-changer. Family offices help with everything from record-keeping to asset management, and they provide a way to keep communication flowing between generations. They’re also a centralized place for important legal and financial documents, which helps ensure that everything is organized and accessible when it’s time to pass things on. It serves the family where the attorney and CPA can not.
But family offices aren’t just about managing money—they also play a key role in preserving family values. For instance, involving younger generations in family philanthropy is a great way to bond over shared values and ensure that the family’s legacy extends beyond financial wealth. However, assuming that heirs will automatically pick up their parents’ charitable causes can lead to disappointment. To make philanthropy work, you need to actively involve the next generation in the process and keep the lines of communication open.
Ultimately, wealth transition isn’t just about setting up trusts and drafting wills. It’s about thinking through the emotional, relational, and logistical aspects of transferring wealth—and making sure that the family remains intact and strong through the process. Advisors need to take a holistic approach, combining technical expertise with emotional intelligence, to guide families through these transitions in a way that maintains harmony and long-term success.
When you’re dealing with multi-generational wealth, it’s not just about the money—it’s about preserving relationships, legacy, and shared values for the future