When a family hands down its wealth, it also hands down the people who manage it. An heir may inherit a chief investment officer, a CFO, a controller and a circle of outside advisors, along with a set of unwritten rules about who decides what. If the best of those people leave, or nobody is sure who now gives them direction, the wealth is exposed, however carefully the estate plan was drafted.
Cerulli Associates projected in December 2024 that U.S. wealth transfers would total $124 trillion through 2048. A figure that large invites families to treat succession as a money question, settled through trusts and estate documents. I think the bigger risk lies with the team that will manage the money once it moves.
The evidence suggests that many family offices are not ready for that part of the transfer. For its Global Family Office Report 2026, UBS surveyed 307 of its family office clients in more than 30 markets. Only 35% have a defined succession plan for the family office itself, which UBS describes as a plan for continuity of staff and services. Just 27% have a structured process to educate and prepare heirs for future roles. Both gaps come down to who will lead, who will decide and who will stay, which is why I see the great wealth transfer as a talent problem.
What Losing Key People Costs
In The Family Office Principles, I describe what high turnover among key people can do to a family office. Decisions grow inconsistent and operations are disrupted, and institutional knowledge is lost while the office is pulled into a cycle of recruiting and onboarding that is both costly and destabilizing.
Gallup estimates that replacing a leader or manager costs around 200% of that person’s salary. A 2012 Center for American Progress review of published studies put turnover costs for very highly paid, senior and executive jobs as high as 213% of salary. Among public companies, research published in Harvard Business Review puts the market value wiped out by badly managed CEO and C-suite transitions in the S&P 1500 at more than half a trillion dollars a year.
None of these studies looked at family offices, so they show the scale of the risk rather than its exact size. Even so, they suggest that money spent keeping key people in place can pay for itself. The return shows up in better decisions and fewer expensive errors, and above all in a smoother handoff when the generation in charge steps back.
Succession Happens Twice
Succession in a family office has two sides. Estate planning addresses ownership, meaning who will own and control the wealth. Leadership, meaning who will run the office day to day, family member or not, is the side the UBS figures suggest is frequently left open. UBS also notes that the current generation is often not yet willing to hand over responsibilities, which can leave the leadership question unanswered until events force it.
A family that leaves it open takes a real risk, since a leadership vacuum during a transition can lead to key staff leaving and assets being mismanaged. The leadership question therefore deserves the same care as the ownership question, years before it becomes urgent. An honest start is to establish whether the next generation actually wants to lead, whether the family would accept an outside executive, and how the departing leader will stay involved without getting in the way. Because the conversations can be emotional, it is not uncommon to bring in a neutral outside advisor who can help the family reach a decision everyone can accept.
With those answers in hand, the family can plan the path deliberately. A family successor needs early preparation, through rotations across roles or a stint working outside the family, along with a mentor and a gradual handover. For an outside executive, the search should start early and run against clear criteria, and the new leader should overlap with the outgoing one so that knowledge and relationships pass in person. Either way, more than one generation belongs in the planning, because the people who will live with the outcome should help shape it.
Decide Who Decides
For the professionals in a family office, the governance question that matters most is who gets to decide what. The family sets the direction and makes the truly major decisions, while the professionals own execution within those guidelines. A family might set the investment policy, for instance, and leave the chief investment officer to work within it. When that line blurs, families can drift toward one of two failures, micromanaging their experts or losing touch with their own wealth, and the first can drive good people away.
In the first generation, one person may decide everything. By the second, a group of siblings shares control, and by the third there may be a dozen cousins, many holding their interests through trusts. Each shift in who holds control also changes who the staff answer to, so the lines need to be redrawn at every stage rather than inherited by default.
Written decision rights protect the family and its team alike. A professional who knows which calls are theirs can act without waiting for permission. An office organized that way can also keep running when a key family member or executive leaves, because it does not depend on one personality.
Keep the People Who Carry the Knowledge
Many family offices are small, which concentrates knowledge in a handful of people who know where everything is, how the family thinks and why past decisions were made. When one of them leaves, what they know can walk out the door with them. The risk tends to rise during a transition, as a new principal arrives and good people begin to wonder whether they still have a future.
The work starts well before any handover, with an honest list of the few people the office cannot afford to lose. It should reach beyond the investment team, because in the offices UBS surveyed, non-investment professionals in areas such as operations, accounting and legal support make up 40% of staff. For each person on it, the family should ask what they know that no one else does and what would stop if they left.
People on that list need reasons to stay that do not depend on who ends up in charge. Day to day, that means treating them as long-term partners, with clear roles and real autonomy. Because a small office may have no promotion ladder, it also means letting the role itself grow, through more responsibility, a bigger title or a seat on the board of a family enterprise. As the handover approaches, the outgoing leader and the successor should tell them about the plan directly and early, before rumors reach them. They should also bring these people into the family’s thinking about what comes next, so that they feel they share in the legacy.
Many senior hires sign employment agreements that set notice periods or severance if they are let go without cause. When a new principal is about to arrive, those terms can reassure the executives who have them. A long-term bonus that vests only after the handover is complete gives them a financial reason to see it through. Cross-training and written procedures protect the office if someone leaves anyway, so that one person’s departure does not stop the work and what they knew stays behind.
Prepare the Heir to Lead the Team
Financial literacy is the usual starting point for preparing an heir, and it matters. The heir will also have to lead professionals who know the work far better than the heir does. An unprepared family member placed in charge of them is a recipe for frustration on both sides.
A rising family member can shadow the CFO for a year to see how the office actually runs, or chair the family’s philanthropy committee, where real decisions come with lower stakes. On the board, a new family director can sit alongside an experienced independent director and learn from a working model. An heir who has done these things takes over with some of the team’s trust already earned.
A Team or a Vacuum
The money will change hands whatever a family does. Whether a capable team comes with it, or a vacuum, depends on choices made years before the handover. At Arootah, we help family offices make those choices, from planning the succession to keeping the people who make it work.
If you want a place to start, answer five questions this year:
- If the person running your office stepped back tomorrow, who would run it, and does everyone know that?
- Have you written down which decisions belong to the family and which belong to the professionals?
- Which people would your office struggle most to lose, and what keeps them there?
- What is your next generation doing this year to learn to lead the team?
- Do you know what it would cost to replace your most senior people, and does your budget reflect it?
If any of them is hard to answer, a best practice review from Arootah can help you work through it.
