The number is striking: only 30% of families with assets exceeding one billion dollars make it to the third generation in Latin America. By the fourth, that number drops to between 4% and 7%. Jorge Narváez Hasfura says it plainly. With nearly four decades of experience at Baker McKenzie, he has seen the pattern repeat itself: fortunes built with long-term vision quietly dissolve—not because of markets, but because of everything that happens (or fails to happen) within families.

“The generation that creates wealth works, builds, and passes it on,” he explains. “But the second generation often lacks the same drive and long-term vision. It begins to focus more on immediate use rather than reinvestment.” What follows is almost always the same: by the time the third generation arrives, what remains of the fortune has been diluted.

Yet the problem is not inevitable. Colleagues of Jorge recently published an article in Bloomberg arguing that the so-called “three-generation curse” is not destiny—it is a design failure.

Not the Markets. The Family.

Jorge identifies several real causes behind this phenomenon. The first is structural: today’s families are multijurisdictional. Globalization has spread them across countries, introducing layers of complexity—different legal systems, tax regimes, and cultural expectations.

The second is generational—not of values, but of time horizons. “Founders optimize for the long term. The second generation seeks stability. The third tends to prioritize liquidity and flexibility,” he notes. When these differences are not clearly addressed within a governance structure, wealth-related discussions turn into personal conflicts—and sometimes moral accusations.

Another overlooked issue is that the documents meant to govern family wealth become outdated. Wills, trusts, and shareholder agreements are drafted at a specific moment in a family’s history—when things are simpler. Over time, they become sources of ambiguity. “They must be treated as living documents,” Jorge says. “Instruments that evolve as the family evolves.”

There is also a cultural taboo that worsens everything: in Mexico and across Latin America, families avoid talking about succession and inheritance. When death occurs, there is no structure in place to sustain the transition.

The Solution: A System Built by Design.

What Jorge proposes is not bureaucracy—it is the opposite.

“This is not about filling drawers with documents no one reads or hiring advisors to produce meaningless paperwork,” he clarifies. “It’s about building a system of rules, structures, and close conversations that genuinely respond to what the family needs.”

That system has a name: family governance. Its premise is simple yet powerful: families that successfully preserve wealth across generations do not do so by luck or market conditions. They do it because they treat generational continuity as something consciously built—not something that simply happens.

This involves clear decision-making protocols, so that every major decision does not turn into a power negotiation between family branches; separating ownership from management, because being a shareholder does not automatically make someone a capable operator; and preparing heirs before wealth reaches them.

“Wealth that arrives without the process that created it generates vulnerability,” Jorge says.

Inheritance tax is also part of the equation. While it does not yet exist in Mexico, it represents a significant impact on wealth in the United States, Europe, and several Latin American jurisdictions. “Knowing that this tax exists, families must invest in ways that allow them to absorb it without being forced to sell what they intend to preserve,” he warns.

El impuesto sucesorio es también parte de la ecuación. En México no existe aún, pero en Estados Unidos, Europa y varias jurisdicciones de América Latina representa un golpe significativo al patrimonio. “Sabiendo que viene ese impuesto, hay que hacer inversiones que permitan afrontarlo sin obligar a la familia a vender lo que precisamente se quiere transmitir”, advierte.

A Wealthy Note

Jorge’s conclusion is as direct as his diagnosis: beyond tax strategies or corporate structures, what truly matters is how to grow—or at least sustain—wealth over time. And that does not happen on its own.

It requires a system.
It requires conversations many families are still unwilling to have.
It requires understanding legacy not as something inherited—but as something deliberately built.