Succession, governance and the next generation in US Family Offices

Key takeaways

• Recent surveys show that North American family offices are planning to transition control to the next generation within a decade, amidst a historic wealth transfer now underway in the US.
• The proportion of family offices with succession plans in place has risen significantly, but important gaps in governance and documentation persist.
• The greatest challenge in succession planning remains ensuring the tax-efficient transfer of wealth, followed by establishing the right legal structures to protect assets across generations.
• Next-generation education and preparation remain among the lowest-rated family office functions, indicating an area where substantial improvement is needed.

A generational inflection point

The modern family office stands at a pivotal moment. With one of the largest intergenerational wealth transfers in history now underway in the US, the next decade will redefine how families manage, preserve and grow their legacies. A significant majority of North American family offices expect the transition to the next generation to happen within the next ten years, a timeline accelerated by the surge in family office formation that took place immediately after the turn of the millennium.

The structures, governance frameworks and legal documentation put in place now will determine whether wealth is preserved or dissipated across the generational transition. Getting this right requires a deep understanding of the family's objectives, the relevant tax landscape and the jurisdictions in which assets are held.

Governance structures are strengthening, but gaps persist

It is encouraging that a growing proportion of North American family offices now have succession plans in place. Mission statements have become the most prevalent governance document, overtaking strategic investment frameworks for the first time, and family councils are becoming more common.

However, significant gaps remain. The family offices that lack governance arrangements are almost exclusively first- and second-generation operations, where there is often little impetus to formalize structures whilst the number of family members remains small. Crucially, not all governance arrangements are formally documented; undocumented plans, whilst potentially communicated and agreed between family members, raise serious questions about enforceability in the event of disputes over leadership succession. Very few families have a formal mechanism for resolving conflict, leaving them exposed to the risk of protracted and costly disputes that could fracture both the family and its wealth.

The formalization of governance frameworks is not merely good practice but a critical risk mitigation measure. Properly drafted family constitutions, shareholder agreements, trust deeds and articles of association provide the legal architecture that supports orderly succession and minimizes the scope for dispute.

The tax-efficient transfer challenge

Where families do have succession plans, the greatest challenge they face is ensuring the transfer of wealth in the most tax-efficient manner. This is followed by defining and establishing the right legal structures to transfer assets and ensuring the family's assets remain protected through generations. In the US, where tax law is a particular focus, we are seeing that irrevocable trusts are the principal wealth preservation vehicle, with many family offices employing a significant number of trusts within their structures.

The complexity of US estate and gift tax, combined with the possibility of legislative changes to exemption thresholds, makes advance planning essential. Families with cross-border assets face an additional layer of complexity, requiring coordination between advisers in multiple jurisdictions to avoid double taxation and ensure compliance with reporting obligations such as FATCA and CRS.

Preparing the next generation

When the next generation are not consulted from the outset of succession planning, this can create the potential for misunderstandings and disputes in the future. The changes expected with the next generation are significant. Family offices anticipate an increase in the use of technology, AI and cybersecurity solutions, and higher allocations to alternative investments. Where the founding principal is less involved in day-to-day operations, there is a notably higher expectation that the next generation will change the mission or purpose of the office entirely, a prospect that reinforces the importance of well-drafted governance documents that can accommodate evolving family priorities without requiring wholesale restructuring.

With the evolution we have witnessed over early 2026 centering around "cautious conviction", appropriate, watertight structuring solutions are critical. This is about private clients and family offices building in more defensive measures backed up by robust structures in the short term, whilst maintaining the agility to tap into opportunities as they arise.

This insight is part 5 of our ‘6 trends shaping Family Offices in 2026’ series, exploring the legal, tax and strategic issues set to influence private clients and family offices in the year ahead. 

Look out for our next post on diversification, safe havens and the pivot to Asia for US Family Offices.