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Family Wealth

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Family Wealth

Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual and Financial Assets for Generations

Bloomberg Press,

15 min read
10 take-aways
Audio & text

What's inside?

Most families who become wealthy lose their money within three generations. How can you avoid that? Read here.

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Reading James E. Hughes Jr.’s book is like sitting down in an easy chair with brass rivets gleaming in burgundy leather, in a trusted old family friend’s parlor, to obtain a kindly word of advice. You can almost smell the pipe tobacco and taste the brandy as you read. Hughes gently and wisely guides people who want to preserve their family’s wealth on how to think beyond the current fiscal year. This book is genuine and straightforward, with insights gained over many years. Hughes covers creating a family mission statement, instituting a family bank or private trust company, mentoring the next generation, family governance, philanthropy and much more. His most important contribution, however, is the perspective he offers on the human side of the equation. Even the richest families are doomed to squander their inheritances, he cautions, unless they recognize the importance of the intellectual and human development of their family members. getAbstract highly recommends this book of sage advice to anyone who hopes to keep it all in the family.

Summary

Congratulations on Your Success; Who’s Your Successor?

A prominent industrialist who sat on several boards of directors had a favorite way of introducing new CEOs to the realities of corporate leadership. He would watch as a new CEO accepted heartfelt congratulations on the day his election was announced. Then, at just the right moment, he would congratulate the executive and immediately ask, “So, whom are you planning to groom as your successor?” His point was that there is no time to rest, because finding a successor is one of any executive’s most crucial responsibilities, and one of the most difficult. Succession is critical to the long-term viability of any business.

This is even more vital in a family business, where the ability to thrive over the long haul always comes down to the effectiveness of succession. The common saying in the succession planning business is, “From shirt sleeves to shirt sleeves in just three generations.” This warns that just as quickly as a family makes its fortune, it can lose it due to poor governance or bad succession. Even financial success does not make up for poor succession planning. Families attempting to preserve their wealth...

About the Author

James E. Hughes Jr. is a counsel at Day, Berry & Howard. As an attorney and estate planner, he has written several influential journal articles on family governance and wealth preservation. He specializes in multigenerational family meetings that result in family members drafting mission statements, and resolving governance issues. He is a frequent speaker on topics related to estate and trust planning.

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