24 Mar Why 90% of Family Fortunes Don’t Survive the Third Generation — And How Yours Can Thrive

By: Mike Schmitt

Did you know that nearly 90% of family wealth vanishes by the third generation? This sobering statistic, backed by decades of research, is often summed up as “shirtsleeves to shirtsleeves in three generations.” It’s a global pattern, cutting across industries and cultures. The peak of the Bell Curve for the Boomer generation is sitting at 68 years old today. Between the Boomers and the Remaining “Greatest Generation”, there is approximately $83 Trillion in wealth that will be transferred in the next 12-15 years. Whether the next generation is inheriting an operational business, or assets and cash flow, there is a conversation happening around whether the next generation has been prepared to take on this massive responsibility. A common request by some of the families that we work with is to assess the preparedness of the Next Gen and where there might be gaps in preparation, thinking about how to address those.

So, what’s behind this collapse?

The culprits are both practical and human:

– Lack of preparation: Heirs often lack the financial know-how or leadership skills to steward wealth.

– Poor communication: Families sidestep tough talks about money, roles, and responsibility.

– Misaligned values: The founder’s vision fades as later generations chase competing priorities.

– Failure to adapt: Markets shift, yet many family enterprises cling to outdated approaches.

The good news? Your family can beat the odds.

At The Rubra Group, we’ve spent over 15 years helping families defy this trend with research-backed strategies. Here are three proven steps to ensure your fortune and legacy endure:

1. Create a 100-Year Vision

   Enduring families think beyond the next quarter — they plan for the next century. A shared 100-year vision statement unites generations around common goals, whether it’s growing the business, championing philanthropy, or preserving core values. 

   *Pro Tip*: Involve current leaders and next-gen members in drafting it. Ownership fuels accountability.

2. Invest in Financial Literacy & Governance 

   Education and structure are key. Regular family meetings, formal governance (think family councils or boards), and financial training equip heirs to lead. Research shows families prioritizing these steps boost their odds of long-term wealth retention by over 60%.

3. Balance Tradition with Adaptability

   Honor your roots, but don’t let them weigh you down. Encourage innovation, diversify investments, and empower the next generation to contribute fresh ideas. The most resilient families blend legacy with forward-thinking.

Case Study: The Thompson* Family Turnaround 

Consider the Thompsons, a Midwest manufacturing dynasty. By the second generation, profits were slipping due to stagnant strategies and family disputes. We partnered with them to craft a 100-year vision, establish a family council, and train their heirs in financial management. Today, their third generation has diversified into renewable energy, doubling their wealth while staying true to their founding ethos. This isn’t just survival — it’s thriving.

*The Thompson Family Name has been changed to protect the actual family’s privacy

A Final Thought: Preserving wealth isn’t enough; preserving relationships is the real foundation. Strong bonds, honest communication, and a shared purpose are as vital as any investment strategy.

Let’s ensure your family isn’t part of the 90%. Together, we can build a legacy that lasts.

Ready to map out your family’s future? Contact us — we’re here to guide you every step of the way.

If you would like to read our recent book “Family Fortune”, you can access it here: https://a.co/d/3ElVkOn

If you would like to have a conversation with Mike Schmitt, please feel free to schedule a meeting with him here: https://meetings.hubspot.com/mike2616