Family Constitution and Legacy


Home Governance

The Constitution

The Family Constitution is key for the family legacy to thrive. It is the skeletal structure from which family rules, vision, mission, decision-making, roles, management and responsibilities are derived and it is backbone of the multigenerational family and wealth plan. Moreover, it represents an important part in the family brand, family unity and family culture.

Three Generations

In Chinese folklore, there is a saying that "wealth is not supposed to last three generations" and this theme is also carried out in the other countries where the phrases translate to "rich father, noble son and poor grandson". This points to the historic difficulty in maintaining family wealth.

Notwithstanding folklore, good governance is critical for a long multigenerational family legacy.


Next to wealth creation, the Family Constitution is perhaps the most critical element. The Constitution sets forth responsibilities of family members, joint investments, philanthropy, private equity and venture capital, family owned bank, legal advisors, tax efficiencies, regular family meetings to openly discuss all, administration of joint assets, children, marriage, (prenuptial agreements) and divorce, higher education and employment for all family members. To govern all, a constitution is key.

Leaving Your Legacy

When most people think about leaving a legacy, they mean leaving financial assets to their children and grandchildren, their favorite charities, and other heirs. But financial assets are only a small, and arguably the least important, part of your legacy to heirs. A more accurate definition of "legacy" is much broader: the process of transferring all forms of capital to heirs. So a legacy includes passing far more than just financial assets - it includes, human capital, family heritage, health, talents, intellectual capital, social capital, relationships, and for some people, religious or spiritual capital.

There is an undeniable principle that has withstood the test of time, economic and political systems, and geography: in 90% of families, wealth does not survive the third generation. The good news is that research has uncovered the secrets to beating the odds. The formula is straightforward: increase effective communication, trust in your family, prepare your heirs to be good stewards of your family's wealth, and define and live by your family Constitution.

Legacy Planning for Future Generations

If sustainable multigenerational wealth transfer is among your goals, it is critical to focus not only on traditional financial, tax, and estate planning, but also on legacy planning. Legacy planning is "the human side of planning" - planning that ensures your family will stay strong and united for many generations.

Just like financial planning, legacy planning is a process that begins during your lifetime and has a significant effect on the legacy you pass to your heirs. The better your lifetime planning, the more impactful and long-lasting your legacy will be for your heirs. But you can't leave it to chance. If you want your legacy to live on and your family to flourish after you are gone, you must make a commitment to build a solid legacy plan during your lifetime. In the absence of purposeful planning, the odds are against you.

Legacy planning concentrates on the key elements of success: the rules of governance, improving communication skills and trust within the family, educating and preparing your heirs to inherit all forms of capital, and defining your family's unique purpose and mission "the Constitution" which is the superglue that will keep the family together for generations.

Steps to Securing Your Legacy

  • Schedule regular family meetings to discuss the business of being a family, to grow family unity, and encourage individual development and education and ensure that each family member flourishes;

  • Identify family values to which every family member agrees;
  • Balance needs and goals of business, Trusts, foundations etc. Discuss and define the family purpose or mission, the enterprise its agendas and how family members can all work together to live and fulfill that purpose today and for future generations;
  • Define a Constitution. Educate all with wealth awareness and management. Define the roles and responsibilities of family members in regard to the business, wealth structures, control, management, the distribution of benefits and the business of being a family - hopes and aspirations and fulfilling the family purpose, and define a mechanism for decision-making and resolution of conflict that inevitably arise in every family;
  • Teach new generations about family history, values and responsibilities. Define what the generational focus of the family wealth structures should be, or to set down some principles on the sharing of assets and investment principles within the family members who have shared or aligned personal or commercial interests;
  • Expect the unexpected. Health, accidents and the like. Provide for an executive board of key participants drawn from the family as oversight. It is important to establish Prenuptial Agreements; education; inheritances; behavior standards and principles; conflict resolution; expulsion; and the Family Identity.
  • Schedule regular family meetings: Wealth and Value Meetings; Family Enterprise Meetings; Ownership and Inheritance Meetings; and vacations and encourage everyone to attend. Don't forget, the family that has fun together, stays and grows together. Consider ways to inspire and facilitate family meetings and vacations when you are gone;
  • Record and preserve family history, life stories, life lessons, and values;
  • Consider family philanthropy as a way to make a difference in the world, and increase effective communication, education, and family harmony. Set objectives and structures and a Chair for each cause such as Arts, Science, Medicine, Animal Rights etc. This doesn't necessarily mean setting up a large family foundation. Some families make a big difference in their communities by volunteering together for worthy causes.
  • Defining the Legacy

This is the kind of proactive commitment that has helped families beat the odds and successfully pass their wealth in all its forms together with family unity and harmony for generations. Some families accomplish this on their own. Others seek assistance from professionals who specialize in working with families for this purpose.

The cornerstone of this process is to create a Family Legacy Day, an event to create the framework for a family history, culture, rules, governance, communication and trust to sustain family wealth and unity for generations - "the Constitution."

It includes, Guided Discovery a process where you in record and preserve your heritage, life story, life lessons, and values. A Legacy Statement, which follows the completion of the Guided Discovery session, definitely says: "This is who I am. This is where I came from. This is what I believe. This is what I hope for my family, now and in the future." The Guided Discovery can be one of the most meaningful endeavors in giving voice to legacy for future generations.

After considering the various forms of financial and non-financial wealth, individuals who have experienced legacy planning invariably believe that if they could effectively pass their non-financial wealth to their children - if they could strengthen family unity and harmony during their lifetime - their heirs would receive the foundation for a successful and productive life regardless of their financial inheritance. Most all believe that non-financial forms of legacy are the most valuable to their children, both during their lifetimes, and after they are gone.


The process to develop the Constitution and legacy is via research, design, build, execute and overtime refine the plan. We believe that via the process the Family Constitution, containing clearly stated guiding principles and protocols for the family wealth structures, is going to be the key wealth preservation tool for global families over the course of the next decade.

Discover how we can address your needs.