Smart planning today can protect your family’s future for generations to come. Oleg Tsyura, a Zurich-based entrepreneur and investor with over 25 years of experience, examines how business owners and high net worth individuals can preserve their wealth for their families and ensure a lasting legacy for their loved ones.
More than a million people with over $5 million in assets are expected to pass on almost $31 trillion to their families in the next 10 years. Those statistics signal that wealth creates huge opportunities and serious risks. For high net worth families, the real challenge isn’t just passing down wealth, but making sure it continues to grow and stays relevant to the next generation.
Don’t Keep All Your Eggs in One Basket
You would be surprised how often wealthy families end up overly concentrated in just a few asset types, such as real estate, a family business, or a specific market. Diversifying across sectors, geographies, and asset classes helps reduce that risk and gives you more ways to grow your capital over time.
More than half of ultra-wealthy portfolios are tied up in family-owned businesses or homes, often in one country. Such concentration can quietly erode wealth due to factors such as inflation, regulatory changes, an unstable political situation, and a lack of liquidity. What is the antidote? Diversification.
A strong, resilient portfolio spreads investments across global equities, bonds, tangible assets like real estate and commodities, hedge funds, innovative sectors like AI, biotech, and climate tech etc.
JPMorgan’s 2024 Global Family Office report notes that many now allocate around 45% of assets to alternatives and 26% to public equities. The result is portfolios better equipped to handle market swings and tap into new opportunities.
Think Ahead on Taxes — It Pays Off
One of the most overlooked threats to family wealth is taxation, especially inheritance and estate taxes, which vary greatly from country to country.
For instance, in parts of Belgium, heirs could face inheritance taxes of up to 80%. In Spain, that number can climb to nearly 88%. Even in Switzerland, rates can hit 50% depending on the canton and family relationship.
These are not small percentages. Left unmanaged, taxes can chip away at even the most prominent estates. But with good strategies, families keep more of their wealth within the family:
- Trusts and family foundations, which allow you to guide how your assets are used.
- Annual gifting, like the $19,000 per-person exemption in the U.S., can gradually reduce estate size without triggering taxes.
- Tax-loss harvesting, where capital losses are strategically used to offset gains.
- Timing asset sales, especially during lower-income years or when relocating to tax-friendly jurisdictions.
- Tax-advantaged accounts, such as retirement savings plans, life insurance policies, or education funds.
Tax regulations, especially for families with global investments, can be complicated. That is why it is essential to work with an experienced advisor who understands the full picture and can tailor a plan that fits your unique situation.
Build Strong Family Governance and Succession Planning
Wealth is not just about numbers; it is about communicating values, vision, and a shared sense of purpose.
Wealth can bring a family together, or tear it apart. The difference often comes down to structure. Families that handle generational change well usually have a few basics in place:
- A family agreement that explains what they value and who is responsible for what.
- A plan for who takes over and how they will be prepared.
- Regular family meetings where everyone can speak openly.
- Support and education to help younger members feel ready to lead.
With the right setup, wealth becomes a strength, not a stress.
Despite their importance, a JPMorgan study found that nearly 30% of family offices still don’t have formal succession plans. The risks of inaction, conflict, fragmentation, or costly financial mistakes, are too high.
Remaining Flexible with Active Capital Management
For years, passive investing – tracking the market through index funds – was the preferred strategy for capital protection. But today, the situation is different. Markets have become more volatile, with more geopolitical risks and differing asset classes.
As BlackRock’s 2025 outlook notes, markets are entering a new era of volatility, driven by inflationary shocks, geopolitical instability, and technological disruption.
Active investment management is making a comeback. It enables families to:
- Respond to macroeconomic risks more quickly.
- Hedge against downside risk with tools like options and long-short strategies.
- Take advantage of mispriced assets and market inefficiencies.
- Adjust sector allocations based on cycles and trends.
A long-short equity strategy, for example, allows investors to increase exposure when prices are oversold and reduce exposure when markets are overheated, therefore safeguarding capital while capturing upside.
Create a Lasting Legacy
Preserving family heritage from generation to generation does not require a single solution; it requires combining and harmonising the right elements. Start with diversification: spread your assets across various markets and asset classes to reduce risk and stimulate new growth flows.
But protecting wealth is not just about numbers. Successful families across generations place equal importance on governance. This involves clear communication, shared values, and a structure that avoids conflict and ensures a common understanding.
Active management also plays a key role. Markets rush, and it is crucial to be proactive, rather than reactive, to events to make informed decisions in real time. The interaction of all these elements creates a powerful tool: a plan that not only protects the legacy from destruction but also allows the next generation to build on it in a targeted manner.
A lasting legacy doesn’t happen by accident. It requires commitment, planning, and a long-term perspective. Families who choose this approach benefit financially and build their future.
Oleg Tsyura is a Zurich-based independent investor and entrepreneur.