In this week’s edition of FFI Practitioner, William Kambas of Withers and Amy Szostak of Northern Trust explore how estate-planning structures can help prepare rising-generation family members to understand, participate in, and eventually steward shared assets. Building on themes developed in two previous contributions from Kambas in the 2026 series, this collaborative article connects purpose, governance, education, and thoughtful drafting to support family cohesion and responsible participation across generations.

Traditional estate planning has long focused on the efficient transfer, protection, and administration of financial capital. For families with multigenerational goals, those objectives remain essential, but many families also benefit from preparing rising generations not merely to receive financial wealth, but to understand, participate in, and eventually steward shared assets such as a business, pooled investments, or a family foundation.

Technical competence in tax, trust, fiduciary, and reporting matters remains indispensable. Yet, increasingly, families need help translating legal structures into systems that all participants can understand, trust, and ultimately help manage. A structure may be technically sound while failing to prepare beneficiaries for responsible participation. Conversely, integrating self-reflection, communication, and shared decision-making can make those structures more durable, legitimate, and effective over time.

This article proposes practical considerations that complement traditional planning by connecting structure to purpose. This approach is consistent with the discussion we hosted at the TransContinental Trust Conference in Bermuda in June 2026 and builds on the Five Steps to Family Engagement framework developed by Amy Szostak and Stan Treger: reflect, share, align, engage, and reassess. The framework helps families move from individual values and aspirations to shared purpose and, ultimately, to asset-holding structures operated for positive individual and financial results. “Reflection” encourages family members to consider their relationship with financial and personal wealth; “Sharing” fosters transparency and understanding; “Alignment” identifies common purpose while respecting differences; “Engagement” creates opportunities to practice responsibility through structured participation; and “Reassessment” keeps management and financial operating systems relevant as family circumstances, assets, and priorities evolve. Together, these steps connect technical family partnerships, corporations, and trusts to the human dimensions required for long-term success.

Broaden the Family Balance Sheet

The impact of monitoring wealth extends beyond financial assets. It affects relationships, opportunities, identity, and decision-making. Advisors should therefore consider a broader family balance sheet that includes financial, human, intellectual, social, and purpose-based capital. Financial capital supports the system, but the long-term stability of a family enterprise depends equally on the quality of its people, relationships, knowledge, and shared sense of purpose.

This broader perspective has practical consequences. Families with strong financial resources but weak mutual trust may need decision-making infrastructure before additional monetary assets are pooled. Rising-generation members may need education and observation rights before assuming governance responsibilities. Families with differing priorities may need mechanisms for autonomy, division, or exit. Purpose and family readiness should be considered alongside traditional planning objectives.

The advisor’s contribution is to make these qualitative considerations operational. The question is not only how assets should pass, but also what skills family members need to develop and how structures can support that development. A broader balance sheet expands opportunities for participation by recognizing contributions through philanthropy, education, family leadership, and stewardship roles—not merely financial expertise.

Begin with Purpose Before Structure

Purpose is not a preamble to estate planning; it is the organizing principle that explains why assets are held together and how future decision-makers should evaluate competing choices. Without purpose, structures become tax-efficient containers. With purpose, they become tools for stewardship, family cohesion, and long-term flourishing.

Family alignment often begins with individual reflection. Family members benefit from considering their relationship with wealth, their desired outcomes, and the assumptions shaping their views. Sharing those perspectives helps identify common ground and build trust, allowing a collective purpose to emerge while preserving individual differences. This approach does not require uniformity. Instead, it creates a process for transforming diverse perspectives into a shared direction.

Purpose should shape structure. A family seeking primarily to maximize wealth accumulation may require a different governance model than one focused on developing flourishing, capable family members. Purpose influences decision rights, distribution policies, investment strategy, philanthropy, education, employment criteria, and family office services. When clearly defined, purpose becomes the guiding reference point for governance and administration. It can serve as the opening statement for family meetings, inform governing documents, and guide future leaders long after the original wealth creators are gone.

Translate Purpose into Governance

The term “governance” is often used but means different things to different people. In essence, it is the bridge between purpose and action: the process of moving from strategy to tactical execution. It establishes decision rights, accountability, and conflict-resolution processes while balancing the needs of family, ownership, operating businesses, investments, and philanthropy. Some authority may be centralized for efficiency, risk management, or tax reasons, while other decisions may remain with branches or individuals to preserve autonomy and legitimacy.

Using a repeatable framework like the Five Steps offers a predictable roadmap for implementing purpose. Reflection clarifies values and concerns. Sharing builds trust and transparency. Alignment converts individual perspectives into common purpose. Engagement develops skills through participation and decision-making. Reassessment creates a feedback loop so structures can adapt as the family evolves. Together, these steps can be built into many documents—from partnership agreements to trust committees—and transform potentially stale legal documents into shared agreements for stewardship.

A starting point for the design of a governance system might focus on three core questions:

• Who decides?
• Who executes?
• How are conflicts resolved?

Answering these questions in advance strengthens accountability, supports participation, and reduces ambiguity when leadership transitions occur or difficult decisions must be made.

Design Roles Before They Are Needed

Roles embedded throughout estate-planning structures are most effective when established before individuals seek them. Predefined roles and eligibility standards are generally viewed as objective opportunities rather than personal judgments. Clear criteria reduce perceptions of entitlement and help align responsibility with capability.

Roles should include eligibility requirements, term limits, reporting expectations, conflict standards, confidentiality requirements, and training obligations. Clearly defined positions give family members opportunities to opt in or opt out based on their interests and capabilities, benefiting both the individual and the enterprise.

Committee structures can provide opportunities. In addition to investment, distribution, audit, and philanthropy committees, families may establish education, communications and meetings, or next-generation committees that allow participation across a broad range of interests. Engagement through these roles creates practical learning experiences that often prove more valuable than formal instruction alone.

Build Flexibility Without Losing Coherence

Multigenerational structures must be stable enough to inspire confidence yet flexible enough to adapt. Families evolve over time, and legal, tax, and investment environments change as well. Making adaptation part of the process helps ensure that structures remain aligned with family needs and circumstances.

Legal documents, including operating agreements, bylaws, and trust agreements, should anticipate future modifications not only with a generic amendment clause, but also by defining who may initiate change, what approvals are required, and what principles should guide decisions. Well-drafted agreements provide clarity around authority, notices, reporting, transfers, succession, disputes, and other foreseeable transitions.

Periodic reassessment, the final step in the Five Steps framework, promotes engagement by giving family members confidence that their perspectives can be incorporated over time. It also teaches family members how the system works while reinforcing stewardship by keeping purpose at the center of decision-making.

Treat Exit Planning as an Opportunity

In sophisticated businesses and co-investments, participants can negotiate exit rights such as puts, calls, redemptions, or term periods. Family enterprise is no different. Thoughtfully designed exit provisions can strengthen commitment by preserving autonomy and reducing coercion. Family clients and co-investors may be more willing to remain engaged when they understand their options and know participation is a choice rather than an obligation.

Transparent rules governing liquidity, redemption, transfers, branch separation, and liquidation help preserve relationships when separation becomes necessary. Effective agreements respect both shared purpose and individual needs. Exit, when thoughtfully planned, becomes part of a healthy, business-oriented system rather than evidence of failure.

Educate While Integrating

No one knows everything all at once. Education—whether self-directed, experiential, or provided through coaching—helps all involved understand the purpose, care, maintenance, and responsibilities associated with shared assets before learning the full scale of a family’s financial wealth.

Financial literacy can begin early through everyday experiences that reinforce values and healthy habits. Over time, education can expand to trusts, partnerships, fiduciary duties, governance structures, and the rationale behind family entities. Practical experiences such as observation rights, committee participation, philanthropy, and supervised projects often teach judgment more effectively than lectures. Knowledge becomes skill through practice over time. Starting early and establishing readiness criteria for disclosure can reduce anxiety, improve understanding, and prevent decisions driven by pressure or avoidance. Elements of an estate-planning structure offer opportunities to introduce and teach concepts, as well as to engage individuals.

Conclusion

Successfully integrating the rising generation requires more than disclosure, distribution, or succession planning. It requires a system in which purpose informs governance, education precedes authority, roles are earned and understood, flexibility is built into the structure, and exit options are available without judgment. These concepts can be left to good judgment and common sense, but we often find that “common sense is anything but common.” Careful drafting and alignment between structure and goals go a long way toward success. Incorporating concepts like the Five Steps to Family Engagement into entity creation and estate planning helps families sustain not only financial capital, but also the human, intellectual, social, and purpose-based capital required for multigenerational success.

About the Contributors

Amy E. Szostak is the Director of Family Education and Governance at Northern Trust Company. She has more than 30 years of experience helping multigenerational families successfully navigate wealth transfers. Amy is a Fellow of the American College of Trust and Estate Counsel (ACTEC) and frequent speaker on family engagement and fiduciary topics.