Michael J. Nathanson

It’ s something that can help every family, not only in keeping their wealth, but keeping their identity.

OST FAMILIES, NO MATTER WHAT THEIR LEVEL OF wealth, share certain principles, whether they realize it or not. These principles are demonstrated in the stories they tell, the traditions they uphold, and the way they make decisions, large and small. Around dinner tables, on family trips, during holidays, and in everyday conversations, families naturally tend to pass along what they stand for and what they hope future generations will carry forward.

But as families grow larger, as they become wealthier and as their relationships grow more complex, it becomes important to make these principles more explicit and their true intentions need to be written down. This is where the idea of“ family governance” comes into play. If they don’ t, the families may find that both their values and their wealth can erode over time. Remember the expression“ shirtsleeves to shirtsleeves in three generations”? It’ s the fear that a family’ s wealth may be squandered within a few generations when later family members’ values start to diverge from those of previous generations, especially from the founders, whose efforts, sacrifices and work creating the wealth are at risk of being forgotten. Effective family governance can help family members remember what those values are. It’ s more than just a safeguard against imprudent financial behavior by family members.

What Is Family Governance?

To begin, it is helpful to clarify what family governance is not. It is not a mechanism for imposing rules and restrictions on family members or telling them

14 | FINANCIAL ADVISOR MAGAZINE | MAY / JUNE 2026 WWW. FA-MAG. COM