Succession planning has become one of the central challenges for wealthy families. What determines whether this wealth transfer succeeds is often less about markets or structures - and more about how families communicate, decide and govern. We look at a specific use case to learn about the six most common challenges to watch out for.
For many families, the hardest part of wealth is not creating it, but deciding what should happen to it next - and who should decide. Questions of ownership, responsibility and legacy often remain unspoken for years, until a triggering event forces decisions under pressure.
In my work as a Senior Family Advisor, I have seen these patterns repeatedly. One Swiss real estate family I advise - whom I will refer to as the Millers - illustrates how easily these dynamics arise, and how they can be addressed.
The Miller family owns three distinct types of property:
All assets are still registered in the father's name. He has three daughters and one son. All four siblings are married, have prenuptial agreements and maintain a good relationship with one another.
Over recent years, the youngest daughter has gradually become the de facto CEO of the real estate business. She manages the portfolio and knows the assets in depth. Yet there is no formal appointment, no written mandate and no clear reporting structure. Her two sisters have little interest in real estate, while the brother is only marginally involved.
Additionally, there is no will, no shareholders' agreement and no shared understanding of key questions:
To further complicate matters, like many entrepreneurial families, the Millers have become increasingly international. One child lives abroad, the grandchildren study in different countries and some assets are held outside Switzerland. As a result, tax, legal and succession questions are far more complex than they were a generation ago.
The Millers' situation brings together six recurring challenges we often observe when families transfer wealth. Each of them offers insight into where well-intentioned planning can go wrong.
In many families, wealth remains a taboo topic - this is one of the main insights of our recently published "Wealth for impact" study. Around three quarters of next-generation interviewees say they were not taught how to feel at ease with wealth and explicitly ask for open conversations about what wealth means and what it is for. Without such dialogue, many next gens feel unprepared and isolated.
In the Millers' case, fundamental questions had never been openly discussed:
When the family sought our support, the first step was not legal drafting or structural measures, but a deliberate pause. The father initiated a structured family conversation in which, for the first time, each child was invited to articulate how they see their future - and the role the family assets should play in it.
A striking number of next-generation family members feel unprepared for succession and fear potential conflict. In many families, succession is managed through de facto arrangements rather than de jure clarity: Someone assumes the role of CEO or lead owner without a clearly defined mandate. This pattern appears repeatedly in our advisory work and is also reflected in the findings of our study.
In the Millers' case, the youngest daughter carried operational responsibility without a formal succession mandate, while the roles of the other siblings remained undefined. There was no shared understanding of what would happen if the father stepped back or died - a textbook example of informal arrangements without legitimacy.
Through renewed, deep dialogue, the family began to differentiate more clearly:
Our study examines wealth in many of its facets, exploring how different generations approach creating, investing, spending, giving and transferring wealth. It aims to inspire wealth holders to live their values in practice - and to engage in meaningful, forward-looking discussions within their families.
One of the key findings of our study is that families whose wealth endures beyond the third generation typically share three characteristics:
In the Millers' case, there was no will, no shareholders' agreement and no documented succession plan. If nothing changed, Swiss statutory rules - and increasingly foreign rules for internationally based family members - would determine the outcome. This is precisely the risk of missing or outdated planning: default rules apply, and the likelihood of conflict increases.
When we first met, the father's instinct was to solve this by designing a highly detailed holding structure in his will. The idea was to keep all assets together and oblige all four siblings to remain co-owners and co-managers under an extensive set of conditions. On paper, this looked like thorough planning. In reality, it led directly to challenge no. 4.
Many families fall into the trap of trying to design the "perfect solution" - one that anticipates every possible scenario. Our study warns that this often results in over-engineered, rigid structures that quickly become outdated. At the other extreme, some families avoid decisions altogether, hoping matters will resolve themselves.
Father Miller's initial plan - a tightly controlled holding that would force his children to remain bound together under strict rules after his death - is a clear example of trying to be smarter than life. It would have
By stepping back from this approach and engaging his children early, he followed the path more commonly seen in families that succeed over generations: starting with values and principles, listening to the next generation and then building flexible, values-based governance.
Benjamin Vetterli is Senior Family Advisor UHNWI at LGT Bank Switzerland. He has been helping families and entrepreneurs structure their assets across generations for 25 years.
Global families face growing complexity from cross-border situations and changing tax regimes. Our "Wealth for impact" study highlights how ignoring tax consequences can erode wealth and significantly limit strategic options.
By pausing the idea of a single, all-encompassing structure after death and instead focusing on a lifetime, step-by-step plan, the father created room for coordinated advice from local external specialists. Family wishes could now be aligned with tax and legal feasibility - rather than conflicts emerging later during probate.
In the Millers' case, there had been no structured consideration of:
The governance chapter of our study shows that long-lived families protect their wealth through a combination of:
In the Millers' case, prenuptial agreements already provided protection against potential future divorces - an important safeguard against outsiders. Internally, however, protection was lacking:
This is a common pattern: tension with spouses can easily spill into ownership discussions, while the absence of internal rules increases the risk of deadlock or misuse.
The family is now working towards a coherent bundle of protections: a formal CEO appointment, a shareholders' agreement with simple decision rules and a basic family charter capturing shared values. This combination of law and governance closely mirrors the successful patterns identified in our "Wealth for impact" report.
The Millers are still on their journey. Yet a crucial shift has already taken place: from solitary planning to shared responsibility.
Their story - and the findings of our "Wealth for impact" study - suggest that successful wealth transfer is less about predicting the future perfectly and more about avoiding common mistakes. Above all, it is about preparing the family for the future through dialogue, clarity and adaptable structures.
The history of our owner family, the Princely Family of Liechtenstein, has taught them how important it is to organise a family and its assets well across generations and to cultivate shared values.
