Family Is What Threatens a Family’s Fortune. Tales From Those in the Know.

The biggest risk family offices face isn’t taxes, regulations, or investments that go south—it’s the family itself, according to the executive of one of these offices.

This executive is speaking from experience. The rich, self-made patriarch he works for hasn’t made a succession plan for his family office despite being in his 70s and unhealthy. Without a plan, the patriarch’s wife and two of his three adult children are on a spending path that could deplete half the family’s wealth by the third generation, the executive said in an interview for a Deloitte Private report published on February 28.

“Overspending is the biggest risk—the numerous houses they have bought that need to be managed, the household staff, the drivers, private jets, yachts, et cetera,” he said. “They have become accustomed to a certain lifestyle.”

The interview was one of 10 experiences of anonymous family office executives that revealed the complexity of managing wealth for super large, super rich families. Their stories are offered to lift a veil on these notoriously private enterprises, “to help the family office community learn from the best about how to successfully navigate the complicated world we live in and plan for long-term success,” according to Rebecca Gooch, global head of insights at Deloitte and a report author.

These offices typically oversee investing and wealth management, but also tasks ranging from day-to-day financial management to estate planning. According to a September report from Deloitte, the number of single-family offices globally increased nearly 31% to an estimated 8,030 last year from 6,130 in 2019, while assets under management rose by 63% to $3.1 trillion.

The rich, ailing patriarch is failing to put a succession plan in place because he fears upsetting those close to him who have taken on senior roles in the family office, despite lacking competence, the executive said.

Deloitte included this case study to show that challenges with succession are common within the wealth community, and are rarely discussed in public. “Normally, they are too private to do that, and once a family loses their wealth, they are no longer captured in family office studies,” Gooch said. “In turn, this is a very interesting and personal warning to the community.”

By contrast, the CEO of another family office described how much he enjoyed working for one of the wealthiest and most high-profile people in the world who wants to spend down his fortune by combating climate change and supporting science and research into neurodegenerative diseases. “We are here to look after the principal, manage what he has, and frankly, to give his money away to good causes,” the CEO said.

The way this family tackles issues is innovative, even among family offices, Gooch said. “The team looks at a problem, such as climate change, and thinks about how to tackle it from a variety of perspectives,” she said. “They look at it from a sustainable investing angle, a philanthropy angle, and a political action front to see if policy changes can make a positive difference.”

Another large, prominent global family—with their main offices in Africa and the U.K.—decided it best to split its operations into two branches to cater to separate wings of the family, a move that runs counter to the more common path of keeping a family together to achieve economies of scale and to avoid redundancies, according to a chief operating officer with the family.

“It was a painful process, but in hindsight, it was the right decision,” the COO said. “Families should feel empowered to do good in their respective ways.”

Other families detailed their experiences with cyberattacks, including the CEO of a U.S.-based office that suffered two attacks in quick succession. In separate research published late last year, Deloitte found 43% of family offices had a cyberattack in the past 12 to 24 months, up from 15% in 2016. Yet nearly a third don’t have a cybersecurity strategy in place, Gooch said.

Although many families now have stories to tell, they “still have a long way to go before they are adequately prepared—and the threats around them, particularly with AI and deep fakes, are rapidly growing in sophistication.”

Corrections & Amplifications

The rich, ailing patriarch described in the report is failing to put a succession plan in place because he fears upsetting those who have taken on senior roles in the family office. An earlier version of this article incorrectly said it was family members who have taken on senior roles.

Yet nearly a third of those surveyed don’t have a cybersecurity strategy in place. An earlier version of this article incorrectly said it was more than a third.

For many Australians, the 2026 Federal Budget initially felt like a direct challenge to the way wealth is created, held and transferred between generations.

The headlines were immediate: changes to capital gains tax, reforms to discretionary trusts, restrictions on negative gearing and increased scrutiny of investment structures. Unsurprisingly, affluent families, business owners and investors began asking the same question:

Is the way we hold our wealth still fit for purpose?

In recent days, the government has announced several significant amendments following industry consultation and public feedback, including exempting testamentary trusts from the proposed 30 per cent minimum tax and expanding capital gains tax concessions for small businesses.

The backdown is welcome. But it also highlights something much bigger.

This Budget has accelerated a conversation that many Australian families have been postponing for years.

The conversation is not really about tax. It is about wealth stewardship.

For decades, Australians have built wealth through businesses, property, investments and careful long-term planning. Yet many families have not revisited the legal structures surrounding those assets in years, sometimes decades.

We often see clients who have spent years building significant wealth, only to discover their legal arrangements no longer reflect their current circumstances.

Their children are now adults. They may own multiple properties.

They may have sold a business, entered a second marriage, become grandparents or accumulated digital assets that did not exist when their original estate plans were prepared.

The trust that distributes income may need to be reconsidered. The bucket company may no longer be so attractive.

The Budget has simply exposed a reality that already existed: wealth structures cannot remain static while life continues to evolve.

Importantly, trusts themselves are not the issue.

Trusts are legitimate planning tools that provide flexibility, protection and continuity. When used appropriately, they allow families to adapt to changing circumstances over time.

And neither is tax the issue, really. Getting the fundamentals right is more important for long-term, sustainable wealth than a few favourable tax treatments around the edges.

The real issue is complacency.

Too often, families create structures and assume the job is done. It isn’t.

Estate planning is no longer a document you sign once and file away in a drawer. It is an ongoing process that should evolve alongside your life.

We are also seeing a broader shift in how Australians define wealth itself. It is no longer just the family home and an investment portfolio.

Modern wealth includes businesses, digital assets, cryptocurrency, intellectual property, frequent flyer points and increasingly complex family arrangements.

At the same time, Australians are living longer than ever before, meaning wealth may need to support multiple generations simultaneously. This creates new responsibilities and new risks.

How do you help your children enter the property market without exposing family wealth to relationship breakdowns?

How do you structure wealth so that it remains a source of opportunity rather than future conflict?

These are the questions families should be asking now.

The recent debate surrounding testamentary trusts also serves as an important reminder that policy decisions can have unintended consequences for vulnerable Australians. It is encouraging that the government has listened to feedback and clarified its position.

But the lesson remains: the wealth landscape is changing.

Increasingly, governments, regulators and tax authorities are paying closer attention to how wealth is held and transferred. That means families cannot afford to adopt a “set-and-forget” approach to their structures.

The families who will be best placed for the future are not necessarily those with the greatest wealth.

They are the families with the greatest clarity. Clarity around ownership, succession and governance. And clarity around how wealth will transition from one generation to the next.

Ultimately, preserving wealth is not about avoiding change.

It is about preparing for it.

Because the greatest risk is not change itself.

It is losing the ability to respond to it.

Anthony Hunt is Co-Founder of Wealth Lawyers and former COO of Westpac Private Bank. He advises business owners, investors and affluent Australian families on wealth protection, succession planning and intergenerational wealth transfer

Family Is What Threatens a Family’s Fortune. Tales From Those in the Know.

The Federal Budget may have softened some of its proposed tax reforms, but it has exposed a bigger issue: too many families are relying on wealth structures that no longer reflect the realities of modern life.