Family Preservation, A PhilosophyFamily Preservation, A Philosophy
Since 1993, I have been running, like Forrest Gump, down every road I could find to try to discover an antidote to the tragedy inherent in the American version of the Chinese proverb, from shirtsleeves to shirtsleeves in three generations, which predicts a family's growth, stagnation, and dissipation. I've searched for ideas and practices that might give me the courage to believe that I could alter
August 1, 2007
James E. Hughes, Jr., retired counselor-at-law, Aspen, Colo.
Since 1993, I have been running, like Forrest Gump, down every road I could find to try to discover an antidote to the tragedy inherent in the American version of the Chinese proverb, “from shirtsleeves to shirtsleeves in three generations,” which predicts a family's growth, stagnation, and dissipation. I've searched for ideas and practices that might give me the courage to believe that I could alter the outcome.
In Family Wealth, I presented basic tenets of my philosophy of preserving family wealth, expressed in these seven fundamental principles:
Long-term preservation of family wealth is a question of human behavior.
The preservation of family wealth is a dynamic process of group activity, or governance, which must be successfully reenergized in each successive generation to overcome the ever-present threat of entropy.
The assets of a family are its individual members.
The wealth of a family consists of the human and intellectual capital of its members. A family's financial capital is a tool to support the growth of the family's human and intellectual capital.
To successfully preserve a family's wealth, individual family members must form a social compact reflecting their shared values. Each successive generation must reaffirm and readopt that social compact.
To successfully preserve its wealth, a family must agree to create a system of representative governance through which to actively practice its values. Each successive generation must reaffirm its participation in that system of governance.
The vision and mission underlying a system of family governance must be to preserve the family's wealth — that is, its human, intellectual, and financial capital — over the long term and to achieve that preservation by enhancing the pursuit of happiness of each individual family member as part of the enhancement of the family as a whole.
I want to restate my belief in that philosophy of family preservation and explain the ideas that underlie these seven principle...
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