Shirtsleeves to Shirtsleeves: Beating the Odds of Sustaining Family Wealth

illustration of a tree with branches and icons of money and family

Many families of wealth struggle with a fundamental question: Can our wealth be sustained across generations and have a positive impact on those who use it? GenSpring has identified a series of best practices for the successful transfer of multi-generational wealth and believes that families who implement them can increase the odds of maintaining the wealth and reduce the likelihood of succumbing to the global phenomenon of “shirtsleeves-to-shirtsleeves in three generations.”

quotes from different regions about shirtsleeves to shirtsleeves

We have found several factors typically impair the successful transfer of multi-generational wealth. These include: poor communication within the family; lack of an established governance system within the family; failure to properly prepare heirs for the responsibilities of inherited wealth; and the lack of a strategic plan regarding the family’s wealth. Failure to address these common pitfalls often results in complete erosion of the wealth created by the first generation and the resulting requirement of the fourth generation to, once again, roll up their “shirtsleeves” and create material success all over.


The Power of Communication

Statistics bear this out. The successful transfer of wealth across generations is as low as 30 percent. Yet, less than 3 percent of these failures stem from poor estate planning and poor investment returns. The majority of wealth-transfer failures – 60 percent – is attributed to the breakdown of communication and trust within the family unit.

diagram of wealth-transfer failure

Since our founding in 1989, GenSpring has worked with individuals and families to help them sustain and enhance their wealth. We have learned that it is essential to recognize the important role the human and intellectual capital of the family plays in successful wealth continuation. GenSpring believes family wealth goes well beyond a family’s financial assets.

Through collaboration with experts, internal research and our hands-on experience working with families of wealth, we have identified six overarching themes and 25 non-financial best practices that we believe enhance a family’s ability to sustain family wealth across generations.

infographic of six overarching themes and 25 non-financial best practices

All in the Family

Beating the odds to sustain family wealth for future generations requires a commitment among all the family’s members. The senior generation typically initiates the conversation, and it is often difficult to do. We have found, however, that the manner in which the dialogue begins can have real impact on its ultimate success. For example, we have found that doing so in an interactive family setting can be a positive first step and provide the foundation for ongoing conversation.

illustration of board game

In order to promote these conversations, GenSpring created an interactive board game for family members of all ages dedicated to understanding the challenge of perpetuating family wealth across generations. The $hirtsleeves to $hirtsleeves™ board game seeks to explore this dynamic concept through three generations (Gen 1, Gen 2, and Gen 3). The board game includes game cards that correspond to typical issues families might encounter in each generation of wealth. The goal of the game is to get to the end of the board with money – a successful transfer of wealth across the generations.

$hirtsleeves to $hirtsleeves™ is intended to provide our client families with a way to introduce important financial and wealth management terms and topics to their adolescent and young adult children in a non-threatening way through a fun interactive family game. Throughout the game, families have the opportunity to converse about taxes, inflation, debt, insurance, umbrella policies, prenuptial agreements, divorce and many other topics related to living a responsible life with wealth. Industry experts agree that children need to be socialized in these topics prior to being confronted with them. Learning about the concept of prenuptial agreements as a wealth preservation strategy provides a family the opportunity to talk about whether such an agreement is or is not in keeping with their family values or way of thinking. Whatever the case, early education is key to preparing future generations to be fiscally responsible inheritors and stewards of wealth.


We have found that families who devote time and effort to the successful adoption of the best practices GenSpring has identified will be better able to anticipate and navigate the many challenges of a successful transfer of multi-generational wealth, and mitigate the risk of the shirtsleeves-to-shirtsleeves paradigm.


Authored by GenSpring | SunTrust Private Wealth Management

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