By: Chelsie Carvajal
Emotional strain, rather than markets or tax rules, may pose some of the most persistent risks to multi‑generational families of wealth, according to a new report from Veritage International. The Missing Link in Family Business Transitions: How Emotional Disconnection Threatens Family Legacy study examines how feelings, expectations, and silence inside business families can unsettle long‑term ownership and succession plans
Where Generations See Different Problems
Researchers conducted 77 in‑depth interviews with 35 founders or current owners and 42 next‑generation members. Participants came from business families and family offices whose primary locations span North America, Europe, Australia and Oceania, Latin America, Asia, and the Middle East. All of them expect to, or have recently, transferred ownership, leadership, or significant wealth, which makes internal alignment a practical concern rather than a theoretical one.
When asked what “adequately equipped” means for inheriting wealth or control, founders and current owners mainly described education, outside work experience, financial literacy, and governance skills. The younger generations stressed emotional readiness, self‑knowledge, and confidence in their ability to express views without repercussion. The report states that this split creates a quiet emotional challenge: each generation believes it is focusing on the right preparation while doubting whether the other truly understands what the future demands.
Emotional Safety, Pressure, and Mental Health
The Veritage team uses the term “emotional governance” to describe how feelings and behavior support or strain the wider family system and enterprise. Founders and current owners in the study most often pointed to entitlement and rivalry as major emotional challenges, typically in relation to the next generation, while the next generation named poor communication and a sense of control from the current owning generation. That contrast suggests that relatives who share the same boardroom table can walk away with very different stories about the risks.
One out of every three next‑generation respondents reported that they do not feel emotionally safe to share their challenges with their family. Survey data shows that 37 percent of founders and 55 percent of next‑generation members have experienced a mental health–related issue, such as anxiety or depression, at some point. The report notes that both generations describe strong pressure to perform, largely self‑driven, and suggests that unaddressed pressure can influence whether the next generation stays engaged or distances itself from leadership and ownership roles.
Governance Gaps and Human Capital Questions
Despite their complexity, many families admitted that their formal governance systems do not directly deal with emotional concerns. Roughly 55 percent of founders and 41 percent of next‑generation participants reported having governance documents that cover succession and wealth transfer, yet 64 percent of founders and 76 percent of younger members said those documents do not address emotional issues or family dynamics. Only about one in ten respondents reported working with external advisors on emotional family dynamics, even though most acknowledged some level of emotional challenge.
The report closes with practical entry points rather than strict rules. Suggested next steps include noticing repeated tension in meetings, opening conversation about emotional safety, and creating agreements about how to talk through difficult topics such as roles, expectations, and questions of “fair” versus “equal.” Veritage observes that many wealthy families invest substantial time and money in financial capital and suggests that giving similar care to human capital may help preserve both relationships and assets as ownership passes from one generation to the next.
The Missing Link in Family Business Transitions: How Emotional Disconnection Threatens Family Legacy report can be downloaded here.
Disclaimer: The information provided in this article is based on findings from Veritage International’s study, The Missing Link in Family Business Transitions: How Emotional Disconnection Threatens Family Legacy. The content is for informational purposes only and does not constitute legal, financial, or professional advice. Any decisions made based on the information provided should be done so after careful consideration and consultation with a qualified advisor. The views and opinions expressed are those of the study participants and do not necessarily reflect the views of Veritage International.
