The Human Factor: Why wealth fails more from silence than markets

An often-cited multi-decade study of affluent families found most lose substantial wealth by Gen-2 and even more by Gen-3—less from markets, more from gaps in trust, communication, and readiness (see Williams & Preisser’s Preparing Heirs for background). Don’t make this abstract. Fix the human layer first.

Start here: run quarterly wealth huddles while the patriarch/matriarch is alive. Keep it simple: a one-page net worth, a values statement, and open Q&A. When discussions turn complex or cross-branch, bring a neutral facilitator to keep debate productive.

Five-question stress test (Yes/No):

• ≥40% of my investable net worth is one ticker (exclude the operating company).

• My estate plan predates my last major life change.

• My advisor, CPA, and attorney never meet together (no joint strategy doc).

• I rely mainly on tax-deferred accounts; little/no Roth, DAF, PPLI/PPVA.

• Our family has never held a structured meeting about money.

Score:

• If any of the last two are “Yes,” you’re Yellow at minimum.
• 0–1 Yes = Green (review annually).
• 2–3 Yes = Yellow (blind spots widening).
• 4–5 Yes = Red (act now; set owners and dates).

How to run a huddle (60–90 minutes, quarterly):

People: Principals + adult heirs. Invite pros only when needed.

Docs (one page each): Net-worth buckets, values & decision rights, action calendar.

Agenda:

1. What changed (liquidity, tax, life).
2. Buckets update (cash, public, private, real assets).
3. Decisions due (with owners and dates).
4. Education item (5–7 minutes—e.g., “How Roth really works”).
5. Parking lot for next time. Rules: No performance chest-thumping. No surprises outside the meeting. Record decisions in a simple log. When to add a facilitator: Multi-branch friction, cross-border issues, complex trusts, or simply rising temperature in the room. A neutral chair keeps debate productive.

Your next moves:

1. Book a 90-minute Wealth Stress Test. You’ll leave with a one-page risk map and a 30/60/90 plan.
2. Unify your pros around one Strategy & Calendar (tax, estate, governance). One document. One set of dates.
3. Schedule the first wealth huddle and publish a decision log. Accountability beats memory.

Reply “Audit” to get my one-page scorecard and a private Calendly link. No forms. No pitch. Just visibility.

Wealth rarely breaks all at once. It leaks through small gaps you don’t notice. Close them now so markets, lawsuits, or rate shocks don’t decide for you.