Explore how shared values, heir preparation, and governance can ensure wealth creates a lasting legacy.
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For affluent families—particularly expatriates balancing lives in Vietnam and assets across borders—wealth can feel like both an opportunity and a burden. The universal cautionary tale of “wealth built by the first generation, sustained by the second, and lost by the third” resonates deeply. Whether it’s “shirtsleeves to shirtsleeves” in the West, “富不过三代” in China, or simply whispered over coffee in Hanoi, this narrative is more common than we care to admit.
But why does this happen? The issue rarely lies in economic misfortune or poor financial planning. Instead, families often fall victim to communication silos, unprepared heirs, and values misalignment. For expatriates, these challenges are magnified by the complexity of cross-border taxation, multi-jurisdictional regulations, and cultural nuances.
How, then, can families break free from the cycle? The answer lies in reimagining wealth—not merely as financial assets, but as the glue that binds families together across generations. This blog explores actionable strategies to help wealthy families transform their fortunes into enduring legacies.
Wealth is often misunderstood as a mere balance sheet. But for families striving for longevity, true wealth must be seen as multidimensional. According to global family wealth frameworks, enduring success depends on five key capitals:
Case in Point: A Hanoi-based family with substantial real estate holdings recently shifted their perspective. Beyond financial gains, they began investing in global education for their children and future generations by setting up a trust for just that purpose, nurturing their human capital. Simultaneously, they used structured philanthropy to build social capital, creating a unified family mission that transcended mere profit.
For expatriate families in Vietnam, this approach is particularly vital. Many live globally mobile lives, with children educated abroad and assets spread across jurisdictions. Seeing wealth as more than numbers ensures that it supports not only personal prosperity but collective purpose.
The adage about wealth dissipating within three generations is not just cultural wisdom—it’s a statistical reality. Families lose wealth not because of market crashes but due to internal fractures.
Wealthy families, especially in Asia, often avoid discussing money. Parents fear it will demotivate their children or create entitlement, but this silence fosters distrust. Heirs left in the dark may feel unprepared or excluded, leading to resentment or financial mismanagement.
Inheriting wealth is about more than understanding investments; it requires emotional readiness and decision-making skills. Without these, heirs often make impulsive decisions that erode family fortunes.
When families lack a shared vision, their goals diverge. A son living in Hong Kong may want to invest aggressively in technology, while a sibling in Ho Chi Minh City might prefer focusing on philanthropy. Without a guiding framework, such conflicts can destabilize the family’s wealth.
Expats’ Unique Challenge: For families with cross-border lives, these issues are compounded by dual tax systems, varying inheritance laws, and cultural expectations.
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To overcome these challenges, wealthy families must embrace tools that balance governance, education, and shared purpose.
A family mission statement provides a “north star” for financial and personal decisions. It aligns wealth with values, fostering cohesion across generations.
Example: A Vietnamese expatriate family with assets in both Hanoi and Singapore crafted a mission statement around education, entrepreneurship, and community impact. Their younger members, previously disengaged, became enthusiastic participants in wealth planning once they understood its purpose.
Action Step: Host a family meeting to discuss these questions:
Clear governance structures prevent misunderstandings and ensure fairness. These can range from formal family councils to legally binding constitutions.
Example: A family with investments spanning Vietnam, Hong Kong, and Europe adopted a multi-tiered governance model. Elders retained advisory roles, while younger members managed day-to-day decisions. This allowed for cultural respect while empowering innovation.
Action Step: Begin with annual meetings where all members openly discuss financial plans, challenges, and responsibilities.
Heirs who lack preparation often squander wealth. Beyond teaching financial literacy, families must instill responsibility and resilience.
Real-Life Story: A family with significant real estate holdings in Ho Chi Minh City created an internal mentorship program. Senior members shared lessons on decision-making, while younger heirs participated in simulated asset management exercises. This hands-on approach built both confidence and competence.
Action Step: Introduce heirs to wealth planning early, starting with small projects like managing a family charity or investing in a modest portfolio.
While many families struggle with wealth preservation, others thrive by taking intentional steps. Here’s what sets them apart:
A high-net-worth family in Da Nang started hosting quarterly “family wealth forums.” These meetings covered everything from investments to philanthropy, fostering trust and accountability.
One expatriate family based in Vietnam and Hong Kong blended traditional respect for elders with modern financial strategies. They implemented a trust managed by professional advisors while allowing family members to oversee specific projects.
A family in Hanoi funded scholarships for Vietnamese students, connecting younger generations to their cultural heritage while making a meaningful societal impact.
For expatriates in Vietnam, managing wealth isn’t just about family—it’s about navigating complex global systems. Key challenges include:
Solution: Advisors play a crucial role in resolving these issues. From structuring assets to minimizing tax exposure, they help families align their financial strategies with global realities.
At its core, wealth is not about accumulation—it’s about creating a life of well-being. Families that succeed in preserving wealth see it as a means to enrich relationships, foster growth, and create impact.
Key Takeaways:
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