It is very hard to be wealthy in today's world. A wealthy family cannot buy freedom from complexity.
It is very hard to be wealthy in today's world. A wealthy family cannot buy freedom from complexity.
Families acquire personal assets, invest in their own businesses and invest the balance in the broader marketplace. Private equity, hedge funds, real estate, cryptocurrencies. Each has its own industry, its own learning curve.
Holding these assets, together with income tax and estate planning, drives families towards enormous complexity. Families create entities and trusts to own assets. The resulting holdings are hard to understand, expensive to own, and difficult (if not impossible) to convert to cash.
Managing those holdings feels a lot like its own business. A business owner worth $5 million with a half dozen private equity investments has a balance sheet structurally comparable to families much wealthier, but with fewer resources to manage it.
The entire industry of advisors is basically geared to help families increase complexity. Financial advisors offer more alternatives. Attorneys recommend entities and trusts. CPA firms pile on as well, finding new tax returns that solve preexisting tax problems. Advisors understand these strategies well, but many of the “advised” will now be confused forever.
Many of these families take the step of forming a family office - I write an entire book on family offices and they are the ideal solution for complex families seeking to retain complexity. But that is not every family.
After years of working with wealthy families, including many extremely wealthy families.
I don't think most families want to create a perpetual investment company for their children. I think most families want future generations to figure out what will work for them.
I don't think most families want their descendants spending countless hours with attorneys, CPAs, and other advisors, or bound together through investment companies, joint ventures and consolidated trusts for generations. These vehicles require future cousins and beyond to have ongoing business relationships and be part of shared governance.
I do think MOST families would prefer, if it is not too costly, to transfer assets in a way that is not disruptive, complicated, or harmful to their beneficiaries.
As wealth grows, complexity seems to compound at an even faster rate. We in the planning world need to understand how complexity impacts every family in order to help manage the consequences of wealth.
Part of Wealth Machine, a Secret Art of Planning series.
I’ll be discussing these ideas at the upcoming Notre Dame Tax & Estate Planning Institute, October 28–30, 2026.
The full paper, “They Shouldn't Inherit My Problems!”, will be available following my presentation in October.
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