The most successful multi-generational family offices treat their operations with the same rigor as a formal business. This includes defined structures, clear missions, and motivating family members, rather than just passively managing wealth.
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An estate plan is more than just a document for distributing assets; it is the bedrock of a family office's succession plan. It establishes the structure, decision-making hierarchy, and guiding principles that allow the family's wealth and legacy to continue operating effectively.
Unlike startups, institutions like CPPIB that must endure for 75+ years need to be the "exact opposite of a founder culture." The focus is on institutionalizing processes so the organization operates independently of any single individual, ensuring stability and succession over many generations of leadership.
To ensure legacy endures, legally embed the family's mission statement, core values, and guiding principles into all trust and partnership documents. This acts as a "character clause" for future generations who may never meet the original wealth creators.
Public companies, beholden to quarterly earnings, often behave like "psychopaths," optimizing for short-term metrics at the expense of customer relationships. In contrast, founder-led or family-owned firms can invest in long-term customer value, leading to more sustainable success.
Successful family offices actively solicit the perspectives of in-laws regarding the family's wealth. Since they "didn't sign up for this" and have an outsider's view, they can provide a unique and valuable perspective on the concerns and potential negative impacts of inherited wealth.
When Jeff Braverman joined his family's struggling nut business, he didn't just ask for a job. He made it clear he needed full control to implement his vision, promising to deliver results. This ultimatum was crucial for overcoming the founders' inertia and enabling true transformation.
Sequoia frames leadership changes not as takeovers but as "intergenerational transfers" of stewardship. This cultural focus on leaving the firm better than they found it is key to its longevity and successful transitions, a model for any long-term partnership.
The primary goal in a family-run business should be preserving relationships, as work provides meaningful time together. Choosing money or ego over family creates tension. Often, the real friction stems from a perceived lack of respect, not just financial disagreements, which can poison the dynamic.
A clear framework for a family office involves three distinct asset "baskets." 1) Personal funds for lifestyle needs. 2) Tax-advantaged trusts for growth assets you can still access. 3) Legacy assets that are irrevocably passed down. This simplifies investment decisions.
Families often default to equal inheritance, but this can be unfair. When one child actively manages the family enterprise, an equitable split that rewards their contribution is more effective for motivation and long-term success than a strictly equal one.