In 2022, UBS published a report showing that 70% of family wealth transitions fail by the second generation, and a staggering 90% by the third.[¹] The reason was not poor investment choices, tax missteps, or market swings, but a lack of preparedness. That is because the tools that built the wealth are different from the ones that serve the legacy.
Families who have done everything “right” – started businesses, taken smart risks, grown portfolios – can still watch it unravel if they are not equipped for a different kind of success: sustaining it.
The reality is, the same mindset that builds wealth is not the one that best protects it.
The Hustle That Built It Won’t Be the System That Sustains It
Building wealth is often fueled by boldness, taking calculated risks, reinvesting profits, and seizing opportunities that others shy away from. It is a game of momentum, vision, and perseverance. But once that wealth is established, the game changes. The goal shifts from acceleration to alignment.
Preservation demands a new skill set—one rooted in intentionality, stewardship, and often, restraint. And perhaps most importantly, it requires the ability to zoom out and see the whole picture, not just the next move, and recognize and incorporate all players involved.
If growing wealth is about climbing the mountain, preserving it is about building a base camp that can support future generations.
Build vs Preserve: The Tools
Here’s a simple analogy: imagine your financial strategy as a toolbox.
To build your wealth, you used:
- Business ownership or equity
- Aggressive investment strategies
- Leverage (debt, reinvestment, sweat equity)
- Hard work and high tolerance for risk
But to preserve your wealth and create a legacy, you need:
- Tax-aware withdrawal strategies
- Asset protection structures
- Liquidity planning
- Philanthropic and intergenerational planning tools
The problem? Most families stick with the first set of tools far too long.
The Risk of Over-Reliance on Growth Tools
Let’s look at a real-world scenario we’ve seen more than once:
A couple sells a business and walks away with $15 million. They’re savvy, still hungry, and ready to put their money to work. So they invest in private equity deals, real estate ventures, and a few other opportunities that come across their desk.
Fast forward five years, and they’re asset-rich but cash-poor. The investments are sound, but they lack liquidity. They do not have the liquidity to achieve some important goals, such as support their children through graduate school, fund a philanthropic vision they care deeply about, and maintain the lifestyle they worked hard to create.[²]
The issue is not bad decision-making or lack of hard work. It is that they used their growth mindset in a season that required a preservation strategy.
The Steward’s Mindset: 3 Shifts That Make All the Difference
If you have accumulated significant wealth and are looking ahead to what is next, it’s time to transition from “builder” to “steward.” Here are three shifts that can help:
1. From Return-Driven to Outcome-Oriented
Instead of asking, What will this investment yield?, start asking, How does this investment support our long-term goals?
Do you need income, flexibility, or stability? Is the goal supporting a family member’s project, taking a sabbatical, or building a charitable foundation? Your investments should reflect your life goals and long-term values.
2. From Tax Filing to Tax Planning
At this stage, tax strategy isn’t just about deductions. The sequence of your actions becomes incredibly important. How and when you sell an asset, how you gift to your children, even how you structure your charitable giving, can significantly impact your long-term outcomes.[³]
Every move should be tax-intelligent, not just tax-compliant.
3. From Control to Communication
As the wealth transitions from one generation to the next, control becomes less important than clarity. Have you had the right conversations with your children? Do they understand your values, not just your balance sheet?
A solid estate plan is critical, but so is preparing your heirs to handle the responsibility that comes with wealth. That preparation starts with trust and transparent communication.
Creating a Legacy Requires Planning Beyond You
Legacy is not built by accident. It is built with intention, often through vehicles like:
- Estate planning
- Philanthropic planning
- Family meetings and mission statements
- Succession planning and education for the next generation
These are not just tools for the ultra-wealthy or the ultra-conservative. They are tools for anyone who sees their wealth as a way to leave a lasting legacy.
A Conversation Worth Having
Life is busy. We often hear, “We just haven’t had the time to deal with this yet.” And we get it. You have been in the trenches building and growing. You are still involved in projects. You still feel the momentum of creation.
But here’s the truth: the best time to start planning your legacy is before you need to. That is when you can be thoughtful, generous, and strategic, without urgency clouding the process.
We help families just like yours make that transition—from builder to steward, from momentum to meaning.
What You Can Do Today
Here are a few steps to get started, no matter where you are in the process:
- Review your asset allocation through a new lens: Is it aligned with your goals for income, flexibility, and legacy, or still positioned for maximum growth?
- Build a liquidity strategy: Identify where your money would come from in the next 90 days if an opportunity or need arose. If that feels unclear, it is worth a second look.
- Begin the legacy conversation: Talk with your advisor about how to prepare your family, not just legally and financially, but emotionally, for the responsibilities ahead.
Final Thoughts
You have worked hard to get where you are. But you also know that real success is not just about building—it’s about building well.
Preserving wealth, protecting it, and using it to create a lasting legacy takes a different kind of discipline. It takes foresight, structure, and a clear understanding of your family’s values and goals.
If you are ready to make the shift from building wealth to stewarding it, we are here to help you do it with confidence and care.
Please note: Each person’s financial situation is unique; this post is for informational purposes only and does not constitute financial, legal, or tax counsel. We encourage you to consult your trusted financial, legal, or tax advisor for guidance tailored to your specific circumstances.
Sources
[¹] Roy O. Williams & Vic Preisser. Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values. Robert D. Reed Publishers, 2003. Also cited in: UBS Global Family Office Report (2021) and PwC, Preparing for Tomorrow’s Workforce, Today (2018)
[²] Schwab Center for Financial Research. Understanding the Liquidity Needs of High-Net-Worth Clients. Northern Trust. Beyond the Balance Sheet: Planning for Liquidity in Family Wealth. (2020).
[³] Ernst & Young (EY) Private. Wealth and Asset Management 2023: The Future of Tax and Legacy Planning. Also supported by: IRS.gov and Charles Schwab Thought Leadership, “Tax-Loss Harvesting and Asset Location.”