How can clearly defined family values help guide decision-making and support wealth across generations?
According to Mel Lagomasino, CEO and Managing Partner at WE Family Offices, making family values explicit can help family members understand what drives their decisions, find common ground and address differences before they create conflict.
In this episode of Inside the Family Office, Mel continues her conversation with fellow Managing Partner, Michael Zeuner, building on their earlier discussion about the characteristics shared by families that successfully sustain wealth across generations.
The conversation focuses on the first of three areas Mel identified: family values. They discuss why values matter, how families can make them explicit and how those values ultimately shape decisions about investments, distributions and the management of family wealth.
They Make Family Values Explicit
Individuals who create significant wealth often have a clear set of values that helped shape their success, whether those values center on hard work, entrepreneurship, stewardship or other principles. But those values are not necessarily shared in the same way by subsequent generations.
As decision-making moves from one generation to the next, differences can emerge among siblings and other family members. Making values explicit gives families a way to understand those differences and identify the principles they share.
Rather than assuming everyone sees wealth and responsibility in the same way, families can use these conversations to establish a common framework for making decisions together.
Values Shape Wealth Decisions
Family values are not simply statements of what matters to a family. They can directly influence how wealth is managed.
For example, one family member may prioritize long-term growth for future generations, while another may place greater importance on current cash flow. Differences in lifestyle expectations can also influence how family members think about distributions.
Making these priorities clear helps families understand why decisions may differ and provides a framework for establishing investment and distribution policies that reflect the family’s shared values and objectives.
Differences Don’t Have to Divide a Family
Not every family member will share the same values or objectives, and making those differences explicit can help determine when shared decision-making makes sense.
Mel and Michael discuss situations where significant differences among siblings may make separate decision-making more constructive than forcing family members to remain aligned around investments, cash flow or other assets.
Separating assets does not have to mean separating the family. When differences are acknowledged rather than suppressed, family members may be able to pursue different financial objectives while maintaining their personal relationships and family connections.
Why Values Matter to Long-Term Sustainability
As wealth passes from one generation to the next, families must make decisions that reflect different experiences, priorities and expectations. Making values explicit gives family members a shared language for discussing those differences and understanding the decisions that follow.
For families working toward long-term wealth sustainability, the goal is not to eliminate differences, but to understand them. Identifying areas of common ground and creating structures can allow family members to make thoughtful decisions together or separately when appropriate.
Key Takeaways
Making family values explicit can help families:
- Create a shared framework for decision-making
- Connect investment and distribution policies to family priorities
- Recognize differences in values before they create ongoing tension
Understanding and articulating family values is a foundational part of building structures that can support both long-term wealth sustainability and family harmony.
If you’d like to discuss how these principles apply to your family’s wealth management and governance structure, please be in touch.
Important Information:
The Wealth Enterprise Briefing contains our current opinions and commentary, which are subject to change without notice. The Briefing is distributed for informational and educational purposes only and does not consider the specific investment objective, financial situation or particular needs of any recipient. Information contained herein has been obtained from sources we believe to be reliable, but we do not guarantee its completeness or accuracy. The information in the Briefing is not a recommendation of any security, and should not be relied upon as investment, legal or tax advice. Please consult with your investment, legal and tax advisors regarding any implications of the information presented in this presentation.
