Welcome to Family Succession and thank you for subscribing. I created this private weekly dispatch to explore the structural strategies that allow elite families to transition capital across multiple generations.
Most founders are like the fastest sprinters in the world. They know exactly how to generate capital, dominate markets, and hire the smartest minds in the room to construct the ultimate legal shield. But putting four world class sprinters on a track does not mean you are going to win a relay race if no one has ever practiced the handoff.
That is exactly what happens to invincible families. They obsess over one leg of the stool, which is growing the money and protecting it from the government, while completely ignoring the other two legs: Family Governance and Succession Planning.
The statistics on this are staggering but completely predictable. A recent private banking study revealed that 86% of family offices have absolutely no formal wealth succession plan in place. I am not talking about who takes over the chief executive title. I am talking about the messy reality of how the family actually operates when the patriarch is gone.
Who makes the global investment decisions when the markets inevitably crash? How much money can a 25 year old heir actually withdraw, and exactly what are they allowed to use it for? What happens when a child marries someone the family secretly despises, and are the prenuptial agreements culturally enforced or just ignored?
If you do not answer these questions while you are alive, your heirs will answer them in a courtroom when you are gone.
You cannot run a nine figure family based on unspoken expectations and assumed goodwill. You have to run it with the exact same operational rigor that you used to build your operating company. This requires an architectural framework that survives your absence. We believe the framework is best described as a three legged stool. The three core pillars in a successful family office are the legacy planning pillar, the succession planning pillar, and the advanced planning pillar.
The legacy planning pillar focuses on family governance, which is how we make decisions as a family and how we provide clarity around roles and responsibilities. The succession planning pillar is the engagement you have with successive generations to learn how to operate the family wealth together in unison, like a well run company. The advanced planning pillar is where you align your tax, legal, and investment structures to your succession and legacy planning. We practically do this by using a couple of resources like the Family Constitution and Family Business Relationship Charter.
This is not a legal document to file in a drawer, but a living, breathing governance manual for the family office. It explicitly outlines the rules of engagement for capital allocation, expected behavior, and dispute resolution. It forces the rising generation to practice making collective decisions while the founders are still at the table to correct their form.
When the governance aligns perfectly with your tax and investment strategies, the multi generational impact becomes unbreakable.
I would much rather watch a family take ten million dollars and thoughtfully steward it into a hundred million, than watch a billionaire family shrink a vast fortune to zero over three generations of bitter litigation. No amount of alpha or investment performance can outrun the risk of a misaligned family. You can successfully transfer every last cent of your wealth to your children. But if the money destroys their relationship with each other, you did not build a legacy.
If you are looking for the exact frameworks to prevent this in your own family, you are in the right place.
Each week, I will focus on a specific subcategory of this three legged stool. We will cover the technical realities of tax, legal, and investment strategies, alongside the unglamorous succession and governance frameworks that elite family offices use to survive. I will share the catastrophic trainwrecks, but more importantly, I will share the strategies that guarantee your wealth endures for a thousand years.
Best,
David Ortiz
Managing Partner | Legacy & Succession
Family Succession is a private dispatch exploring the structural mechanics of enduring family wealth. If you received this from a peer and would like to join the list, you can request access [here].