Is My Family Constitution Unconstitutional?
Law & Inequality (Sua Sponte, Online Publication), Spring 2019
17 Pages Posted: 31 May 2019
Date Written: May 8, 2019
Every high-wealth family should write a constitution, at least that’s what wealth managers say. Because, “[w]ithout careful planning and stewardship, a hard earned fortune can easily be dissipated within a generation or two.” A family constitution, as the name implies, is a governance document that high-wealth families create, setting forth the rules that family members will adhere to in order to protect the family fortune from various kinds of creditor claims, family feuds, and reckless investments. Wealth advisors recommend basing family constitutional design on political constitutions, in particular the United States Constitution. Nevertheless, the financial planning discourse never addresses one critical question: how successful is the analogy? This brief Article posits that the analogy between the two types of constitutions is imperfect in several significant ways and mainly because family constitutions largely ignore some of the core principles that animate a democratic constitution.
Keywords: trusts and estates, family wealth preservation, wealth management, trust law, probate law, high-wealth divorce, family constitutions, family governance, family business
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