Succession planning is often reduced to simple decisions about wills and estate transfers, but in reality, it’s about something far more important: preparing the next generation to handle the responsibilities of wealth. There’s a growing trend among the wealthy to give away large portions of their money to charities, often for tax benefits or to prevent their children from becoming overly dependent on inherited wealth. Many of the successful business owners and individuals I speak with at Maxiam Capital have encountered this idea and believe it resonates with their desire to instill purpose in their children, ensuring they build a life without relying on an enormous financial safety net. The concern is valid—handing over too much money, without the right education, can indeed kill motivation and diminish a sense of purpose.
A startling statistic from a 2018 article on Nasdaq.com highlights this concern: 70% of wealthy families will lose their wealth by the second generation, and by the third generation, 90% of that wealth is gone. These numbers speak to the reality that it’s not just about having money—it’s about being equipped to manage it, grow it, and pass it on.
For many successful individuals who built their wealth through hard work, the idea of leaving large sums to their children feels more like a risk than a reward. They fear wealth may become a trap, making life too easy and robbing their children of the drive that fueled their own success. This concern is real, but it’s only part of the story.
What I’ve learned through conversations with clients is that many of these decisions are driven by fear—the fear of what wealth might do to their children. But the real issue isn’t the money itself—it’s the lack of education on how to manage it. Too many families treat the symptom without tackling the root cause. The problem isn’t the wealth; it’s that the next generation often isn’t prepared to handle it responsibly.
This is why Maxiam Capital launched its internal education curriculum and established Maxiam Academy. We didn’t just want to help families manage their wealth; we wanted to help them build a foundation for how their values intersect with money and life. Maxiam Academy is an exclusive educational program designed for our clients and their family members of all ages, serving as a resource for parents to teach their children how to think about money, build their values around it, and develop the mindset needed to sustain and grow it. In today’s world, where social media bombards young people with get-rich-quick schemes and the lure of easy money, this kind of education is more important than ever.
In my view, succession isn’t about privilege; it’s about responsibility. It’s about teaching the next generation how to be responsible with the resources they have, not just for their own benefit but for the benefit of society. Too often, wealth is seen as an end goal, when in reality, it’s a tool—a means of contributing, building something lasting, and leaving a legacy that’s about more than just dollars and cents. I often use the analogy of a parent who is a Formula 1 driver, which also reflects my own personal interest in the sport. If they’ve spent their life mastering the art of driving a car at over 200 miles per hour, they would understandably hesitate to hand the keys to their child without proper training. The child might spin out, hurt themselves, or worse. But if the child is taught correctly, builds a solid foundation, and learns how to handle that speed and power, they’re more than capable of taking the wheel.
The same principle applies to wealth. Accumulating wealth is difficult, but maintaining and growing it is even harder. It takes years of discipline, experience, and education. Just like compounding works for investments, it applies to families and businesses as well. If we start educating the next generation early, they’ll have the tools they need to succeed. They’ll know how to handle the complexities of wealth, and they’ll be equipped to use it as a tool, not a burden.
In my discussions with families, one theme remains constant: they want to ensure their loved ones are secure. They want to pass down more than just money—they want to pass on their values, work ethic, and approach to life. That’s where succession planning truly matters. It’s not just about distributing assets; it’s about preparing the next generation to manage those assets responsibly, ensuring that wealth continues to grow and provide opportunities for the future.
In the end, what really matters to most families isn’t just the money itself but the security and opportunities it can provide. By focusing on education, values, and responsibility, we can ensure that wealth is preserved and becomes a resource for generations to come, not an obstacle.
Disclosure:
The views expressed in this article are those of the author and do not necessarily reflect the views or opinions of Maxiam Capital. This content is for informational purposes only and does not constitute financial, investment, or professional advice. All investments carry risks, and past performance is not indicative of future results. Maxiam Capital does not endorse or guarantee any third-party content’s accuracy, completeness, or reliability. The reader is solely responsible for any actions taken based on the information in this article and is strongly advised to seek financial advice from a qualified professional before making any investment decisions.
