Wealth disparity among siblings can wreak havoc in families—especially when a family business is involved. Unfortunately, it’s all too common for the family enterprise to magnify wealth disparity and worsen issues of entitlement, exclusion and fairness. To nurture and maintain lasting relationships, it is critical to understand and manage sibling wealth disparity.

Understanding the Path to Sibling Wealth Disparity

As dependents, siblings grow up with similar economic status.  Their relationships are forged as equals.  As they mature, siblings may take very different paths, with diverse opportunities and challenges that impact their individual wealth as adults. This disparity in wealth can often be very visible and impact sibling relationships.

If siblings have a shared understanding about the genesis of the wealth disparity, a common set of values around the purpose of wealth, strong family bonds, and a strategy for addressing the very real challenges it can pose, wealth disparity may not be problematic.  One sibling’s success may even be celebrated by the entire family.  However, more often than not, sibling wealth disparity can stress sibling relationships and develop rifts that can last generations.

Practical Steps to Manage Sibling Wealth Disparity

Here are some productive ways families can address this thorny topic and manage the problems that can develop from sibling wealth disparity:

  1. Develop and articulate a shared vision of family

What does it mean to be family? What is your vision for being family in the future?

If siblings can identify and commit to a shared vision for being family, they will be better able to navigate the challenges of wealth disparity. A skilled facilitator with an understanding of family wealth can make this process smoother and more efficient.

  1. Create a shared narrative about the genesis of the wealth disparity that honors all siblings.

This is often more difficult than it sounds.  A sibling who was given an opportunity that was denied to another sibling at the family business may have prospered disproportionally.  One may have made regrettable choices and lost their wealth.  Another may have married into wealth or succeeded through their own initiative. Whatever the circumstances, when siblings create a shared narrative they are forced to articulate and discuss how they got to where that are.  When difficult issues are at the core, it is very useful to have an outside facilitator help family members reassess their understanding of history and be open to new ways to think about what happened.  This can increase trust and bring siblings closer together.

  1. Create a shared understanding of how wealth should be deployed to serve shared family interests

Agreeing on how both individual and shared wealth should be used, preserved, and borrowed to achieve the shared family vision establishes guardrails to keep family decision making on track. Sometimes, on some points, this can be to disagree. It may also be important to gauge and discuss the extent to which siblings may—or may not— be welcome to weigh in on issues relating to each other’s individual wealth. Find opportunities for purposeful dialogue within and among family branches.

  1. Institutionalize decision making for items that reflect shared values and mission

For example, if education is a family value, wealthier siblings might create a shared education fund to benefit the children of the less well-off siblings. A family venture fund might be created if entrepreneurism is a value. Some families develop a family council to manage and govern these benefits in succeeding generations. There are many models families have used to manage shared wealth, such as family offices or family foundations.

  1. Clarify estate planning and intentions

Searching for what’s “fair” can create a more difficult situation for the next generation.  We often say that “fair” is a four-letter word.  It is an illusion that parents often search for in vain, often creating unintended consequences in the next generation.  Parents must tell their children why they’ve made specific decisions and invite them to share thoughts. There is also limit to what parents can do to make things “fair.” They must also instill in their children the responsibility to treat each other fairly.

  1. Create guidelines

Establishing guidelines for situations such as shared vacations, use of shared vacation properties, and holiday gift giving should enable each branch to participate in a way that is affordable and reflects the family’s shared vision.  This can be especially important when considering wealth disparity through marriage.

  1. Create standards for wealth preservation.

This could include estate planning, insurance, investment management, inter-branch loans, prenuptial agreement requirements and social behavior (e.g., sobriety, risk taking). Provide access to appropriate professionals for all family branches.

  1. Professionalize the business.

When a family business lies at the heart of family wealth, create a proper, independent board and well-articulated policies governing executive compensation, dividend distribution, family employment, and conflict managementWell-designed family business governance is especially important when there is a significant disparity in ownership among siblings. When stakeholders have very different levels of individual wealth, they may see the risks and opportunities to the business very differently.  Good governance ensures that all stakeholders’ interests are represented.

It is not necessarily wealth disparity that causes conflict among siblings; in reality, the values, history and behavior related to the wealth are at issue.

Working together to manage decision making regarding shared assets and discussing individual wealth and wealth disparity can be challenging, but sibling wealth disparity doesn’t have to separate families or damage businesses. In fact, doing the work to manage these challenges proactively is an opportunity to strengthen the family and the family business.


Our facilitators help families align and advance toward their future goals. Schedule a consult to discuss your next meeting.

Thoughtful wealth transfer can empower future generations, instead of making them feel entitled. Read more from our experts.

About Us

Continuity Family Business Consulting is a leading advisory firm for enterprising families. Using a full suite of service capabilities, we help families prevent and manage the single greatest threat to family and business continuity: conflict. It is through this lens that we advise our clients and build customized strategies for succession planning, corporate governance, family governance, and more. We help families improve decision making, maximize potential and achieve continuity. To inquire, visit https://continuityfbc.com/contact-us or call (617) 500-3110.