Publications

- March 1, 2017; Vol. 4, Number 3

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Preserving the Family Fortune: If you think accumulating a king’s ransom is difficult, try holding onto one

by Steffi Claiden

1 “Any fool can make a fortune. It takes a man of brains to hold on to it.” — Cornelius Vanderbilt   The Internet and publications of various kinds are littered with stories about the difficulties wealthy families face in keeping their fortunes intact over time. Apparently, it is a losing battle. The oft-repeated statistics are grim — 70 percent lose their wealth by the second generation and 90 percent by the third generation. In other words, virtually everyone who manages to amass big cash will fail in his or her quest to pass it on. Ouch. What exactly goes wrong? The top reasons for wealth evaporation are generally recognized as: • Unreasonable lifestyle expectations and spending levels • Exponential growth of family over generations, outstripping portfolio growth • Poor planning — or no planning • Asset split and dilution after death of a generation • Lack of go

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