• The family represented by the individual members of the family of affinity
  • The family’s human capital
  • The family’s intellectual capital
  • The family’s financial capital
  • The family’s social capital


Long-term Family Risks

The Proverb, “Shirt sleeves to shirt sleeves in three generations”

  • Failure of family governance
  • Failure to understand that success requires a 100-year plan
  • Failure to comprehend and manage all forms of family capital ….human …intellectual …financial

Intermediate Internal Family Risks

  • Death
  • Divorce
  • Malthus’ Law-the geometric increase of family members in each generation
  • Creditors
  • Poor beneficiary/trustee relations
  • Investment programs of fewer than 50 years

Intermediate External Family Risks

  • Inflation
  • Inadequate trustee management
  • Estate and other forms of transfer and wealth taxes
  • Holocaust
  • Acts of God
  • Changes of political system
  • Lack of personal security

Short-term Family Risks

  • Income taxes
  • Market fluctuation
  • No mission statement
  • Lack of financial education


  • Are individual family members successfully pursuing happiness?
  • Are the family’s human and intellectual capital increasing as measured against the family’s liabilities?
  • Is the family as a whole dynamically preserving itself?
  • Is the family’s governance system producing more good decisions than bad taking a 7th generational view? 

*Special thanks to Charlotte Beyer and The Institute for Private Investors for their invaluable assistance in the creation of this work

Copyright © 1999 by James E. Hughes, Jr.