Why family governance needs a review every few years
Built on Chapter 4 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
Families change faster than their documents. Children grow up and marry. Founders step back. Businesses are sold and new ones are bought. Laws change. A governance framework that fit perfectly when it was written can be out of step within a few years. That is why I suggest families formally review their governance on a regular cycle, often every three years, plus whenever something major happens.
Governance is the rails
In a live family office Q&A I said that governance is "kind of the rails to get the transfer done." It is the path through which wealth survives before it passes to the next generation and after. Without well-maintained rails, the transfer itself becomes risky. (Watch the Q&A.)
I also admitted something in that session. When I started working with families, I heard people talk about family values and largely wrote it off for the first few years. Over time I realized that without strong values and storytelling, plus governance and focus, a family can lose its wealth quickly, through infighting or simply by no longer talking to each other.
How often documents fall behind
In that same Q&A I shared a few real examples from families I had spoken with, without names. One very wealthy individual had drafted estate planning documents once but never signed and filed them. Another, also with a large fortune, had no estate planning in place at all. A third had documents written a decade earlier by a small local attorney who was not suited to the job. These were not careless people. They were busy, and their documents quietly fell behind their lives.
Governance documents drift the same way.
What a review covers
Family changes. New members by birth or marriage, plus heirs reaching adulthood.
Roles. Who sits on the board or committee, and whether those roles still fit.
Decision rules. Whether voting and approval limits still match the size of the wealth.
Policies. Conflicts of interest and family employment, along with the investment policy.
Estate alignment. Whether trusts and entities still match the governance plan.
Values. Whether the family compass still reflects what the family stands for.
How to run a review
Set the date. Put the review on the calendar years in advance so it does not slip.
Gather input. Ask every adult family member what is working and what is not, privately if needed.
Use a facilitator. A neutral advisor keeps the discussion fair across generations.
Involve the attorney. Any changes to legal documents need professional drafting.
Write it up. Record what changed and why, and share it with the family.
A simple review agenda
Many families find a one-day meeting is enough for a routine review. A morning session covers what has changed in the family and the business since the last review. A midday session goes through each policy and asks whether it still works in practice. The afternoon is for proposed changes, with the attorney present or on call. The facilitator closes by listing decisions and next steps, and the office follows up with drafts within a few weeks.
Between reviews
Do not wait three years if something big happens. A sale, a death, a divorce, or a new generation reaching adulthood should trigger a focused review right away.
What to take from this
- Governance is the rails that carry wealth from one generation to the next.
- Documents fall behind life faster than most families expect.
- Review formally every few years, and after major events.
- Use a facilitator and an attorney, and record every change.
This page is general information, not legal advice. Governance and estate documents should be drafted and reviewed by a qualified attorney.
Questions and answers
How often should family governance be reviewed? Many families use a three-year cycle, plus reviews after major events.
What triggers an early review? A sale, a death, a divorce, or heirs reaching adulthood.
Who should take part? All adult family members, a neutral facilitator, and the family's attorney.
What happens if documents fall behind? The transfer of wealth becomes harder, and conflict becomes more likely.