Recently, Family Capital Strategy conducted our first ever survey of in-laws of Family Enterprise. While much research and survey work has been done to analyze lineal descendants of families of wealth, we have seen very little information gathered about the unique experience of those who marry-in to such families.
We were fortunate to received 22 responses to our survey from families all across the US. We would best characterize our research as a temperature check on the space. With a relatively small sample size, our data is by no means exhaustive, but given the strong consensus on several dynamics, we think our work is hopefully indicative of the broader experience of other married-ins.
So, without further ado, let’s highlight a few key take-aways from our survey.
So who responded?
- 80% of respondents had been married for 10 years or more
- 35% married into G2 of the family, while 65% married into G3, G4, or beyond
- As you might guess, given the later generations represented, the families represented are large, with on average at least 35 family members
- 70% still have an operating business, with 55% having a family office as well (either embedded or stand-alone)
- Interestingly, only about 30% of in-laws surveyed came from business owning families themselves. Perhaps a counter-point to the common idea that dynasties tend to inter-marry with one another
- While they may not have come from business owning families, 70% of respondents did have business expertise from their education or professional background.
Entering into the family enterprise:
- Generally, the presence of the family’s wealth was not a surprise to would be spouses, with 55% aware of the family enterprise before or early into the relationship. As things became serious, 90% were aware of the family’s background.
- 70% were not expected to sign a prenuptial agreement upon engagement – perhaps indicative of heavy use of trust structures that lower/limit the need for certain types of ante-nuptial planning
- There remains a lot of work to do for families in how they on-board new members. 80% of in-laws did not have a formal on-board process.
Family Dynamics and Governance:
- Roughly, 65% of families allowed in-law participation in the governance in family. For families where in-laws did not participate, it was generally due to an absence of governance structures vs. explicit exclusion.
- Families are highly involved in each other’s lives – with an average of 6 meetings per year
- Communication is a mixed bag within families. Some family cultures are highly supportive and open in discussions about family wealth. As one respondent noted:
- “Pretty comfortable about money discussions in terms of status of the family enterprise, trust and estate planning, values of businesses . Less comfortable dealing with psychologically adjusting to wealth, spending and consumption, lifestyle, etc. and not comfortable talking about money between branches.”
- Families of origin – 70% of in-laws had not seen tensions arise with their family origin as a result of their involvement in the family enterprise of their in-laws
- 100% of survey respondents indicated that they were supportive of the family enterprise.
- The majority of respondents felt that marrying into wealth and the desire to steward such blessings thoughtfully actually helped develop motivation and spur desire to achieve
- Was ignorance bliss? While most respondents lacked formal on-boarding, in general, it is challenging to point to any specific knowledge gap. General comments from respondents indicated that the most challenging dynamic was fully appreciating the gravitas of the wealth and its impact.
- As 1 person indicated, “I wish I’d recognized the truth of this quote: “You might resolve to live as though that wealth didn’t exist, but sooner or later it would probably insinuate itself into your thinking about jobs, profession, marriage, children.” – The Beneficiary by Janny Scott
- What do you wish others knew?
- Several respondents aptly expressed that balance sheet does not mean cash wealth.
- “Life hasn’t changed that much. Other than not worrying if we will have “enough,” life is still full of challenges and struggles and working and paying bills.”
Certainly there is room for additional research in the field. Obviously 50% of any family enterprise are those who join the system through marriage, and their experience is worth considering as the family’s governance grows and develops over time.