Why Family Wealth Transfers Fail... What the Research Says, and What It Doesn't

By Joe Sugg, Generational Wealth Advocate

You've heard the number.
70% of family wealth is gone by the second generation. 90% by the third.

It's in every seminar, every brochure, every keynote about legacy.
I've used it too.

It's worth knowing where it comes from.

The famous number, and its critics

The 70% figure is usually credited to Roy Williams and Vic Preisser's Preparing Heirs (2003), based on interviews with 3,250 families.

Family wealth psychologist Jim Grubman traced it further back. In his 2022 paper, "There is no 70% rule," he shows the figure mirrors John Ward's 1987 study of about 200 Illinois manufacturing companies, where roughly 30% of family businesses survived into the second generation. Grubman argues there's little other evidence for it, and points to later research that followed whole families rather than single companies and found they lasted much longer.

So treat the famous number with care.
It describes something real. It's not a law of nature.

The more useful question: why

How often transfers fail is debated.
Why they fail is where the research actually helps.

Williams Group's research attributes 60% of failed transfers to a breakdown of trust and communication inside the family, and 25% to heirs who weren't prepared.

That's 85%.
The remaining share is described differently depending on the source. The 2003 review of Preparing Heirs lists technical failures... estate documents, taxes, investment advice. Williams Group's current leadership splits it between missing values and mission and everything else.

Either way, the conclusion holds.
Most of what breaks a family's wealth isn't technical.
It's relational. And it's the part most advisors aren't paid to watch.

Williams Group's research is proprietary and interview-based. It hasn't been published as a peer-reviewed study. It's the most cited work on causes, and that's how we cite it.

The communication gap

The 60% shows up in newer surveys too.

  • 7 in 10 family members say they feel real discomfort talking about wealth. (J.P. Morgan Family Wealth Institute, "The Quiet Disconnect," January 2026)
  • 68% of parents haven't shared inheritance details with their children. (Fidelity Family & Finance Study, November 2025)
  • 95% of adult children say they're ready to manage an inheritance. 25% of their parents disagree. (Fidelity, same study)
  • Only 26% of wealth holders say their heirs are very prepared, and 67% admit they're putting the conversation off. (RBC Wealth Management, May 2025)

Read those together.
The kids think they're ready. A meaningful share of parents don't. And most families haven't had the conversation that would settle it.

The window

Cerulli Associates projects about $124 trillion will transfer in the United States through 2048. About $54 trillion of it passes to a surviving spouse first... more than 95% of that to women.

Most families will make the biggest transfer of their lives without ever deciding, together, what it's for.

One more statistic to retire

You may have heard that 70% of widows fire their husband's advisor.
It doesn't hold up either.

The Kehrer Group analyzed survey data and found 13.7% of recent widows changed or fired advisors, compared with 4.7% of other households. (Kehrer Group, March 2026)

Lower than the myth.
Still almost three times the normal rate.

The pattern is the same as everything above.
When the relationship ran through one person, it leaves with that person.

What it means for a family

The research doesn't say families are doomed.
It says the risk sits where most families aren't looking.

The will, the trust and the entities matter.
They're the part most families have already done.

What decides whether any of it lasts is whether the family can talk, trust each other, and hand the next generation the why... not just the what.

That's the 85%.
It's the part I focus on.

Joe Sugg, Generational Wealth Advocate, is the founder of HeyFi Generational Wealth Advocates, a family governance firm for first-generation families. HeyFi gives no investment, tax or legal advice.

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Sources

  1. Williams, R. and Preisser, V. Preparing Heirs (2003). Review: "Teaching the Rich to Stay Rich," FindLaw, Sept 2003.
  2. Grubman, J. "There is no 70% rule: Improving outcome research in family wealth advising," International Family Offices Journal, June 2022. Summary. Expanded.
  3. Williams Group, current breakdown, Kitces podcast.
  4. J.P. Morgan Family Wealth Institute, "The Quiet Disconnect," January 2026.
  5. Fidelity Family & Finance Study, November 2025.
  6. RBC Wealth Management, May 2025.
  7. Cerulli Associates, $124 trillion through 2048.
  8. Cerulli Associates, $54 trillion to widows through 2048.
  9. Kehrer Group, March 2026.