Families will be most successful in crafting and implementing wealth planning strategies if they work with an advisory team that can recognize when it is necessary to bring in outside governance and family dynamic specialists. Zander notes his team routinely works with leadership development and succession specialists, as well as clinical psychologists. He recommends families develop a governance system that includes regular family meetings and a family council.

"You need a governance system," he says. "You can talk about planning, but subtle family issues not talked about can thwart the ultimate success of the plan."

Psychological factors clearly play a role in families not keeping their estate plans up to date. About 55% of families surveyed say estate planning raises issues that are too difficult to confront. Less than half of that number, 24.5%, said they do not have the time for estate planning; 17% see no need, and 4% say updating their plans would be too expensive.

"Recognizing the complexity of a family as it grows is critical to helping that family take the next step with their estate plans," Zander says. "That is the difference between success and failure. It is hinged on the advisor recognizing his or her strengths and bringing in experts when necessary."

The study also found that many estate plans are flawed. For example, 93.4% say it is important for them to lower their tax obligation in a business transition, yet only 26.8% say it's important to address this issue in a succession plan. Only 26.9% are using asset protection strategies, despite the fact that 89.7% say they are concerned about being involved in an unjust personal lawsuit or divorce. In fact, 64.5% have already been involved in an unjust suit or divorce.

The soundness of estate plans seems tied to how well families work with their advisors, if they work with an advisor at all. About 67% say they do not have an asset protection strategy because no one has shown them how to create one. About 27% say devising a plan was too complicated. Only 2.7% say they do not need an asset protection plan.

Lack of communication among a business owner's various advisors is another reason why plans may not be addressing issues such as tax mitigation and asset protection. A structure that has an advisor, or relationship manager, coordinate planning and family governance, training and counseling can help ensure all aspects of a wealth plan are addressed.

"The study clearly shows the need for a multidisciplinary advisory team with a planning piece and a training piece," Zander says. "You need a team to reach out beyond the legal, tax and financial issues and work with the emotional issues, such as mortality and selecting the next-generation leaders."   

Mindy F. Rosenthal, managing director, North America, for Campden Media, specializes in the wealth management and family governance needs of ultra-high-net-worth individuals and families, with a focus on alternative investments and holistic family office services. More information is available at www.campden.com.