Navigating wealth and legacy: insights for South African families

While high-net-worth (HNW) and ultra-high-net-worth (UHNW) wealth is set to boom in the next five years in South Africa (SA), families face the risk that significant intergenerational wealth can be lost by the third generation if their legacy is not considered as part of a strategically structured portfolio.

This issue can, however, be avoided if families learn to view successful multigenerational wealth transfer as something more meaningful than financial structures.

Drawing on her experience advising HNW and UHNW families, these families can learn to create thriving legacies through intentional emotional, structural, and strategic preparation of the next generation of leaders, who will carry the family brand forward, whether they be appointees or heirs. 

Creating a lasting and impactful legacy requires storytelling, shared values, and well-established family governance.

The rise in family offices in South Africa and globally

SA is home to about 50 family offices, vehicles set up by UHNW families to manage their assets and legacy. According to a recent study by Ocorian, globally, the trend is similar. The 8,030 single-family offices in the world today mark a 31% increase since 2019 and are expected to grow to 10,720 by 2030, a 75% increase in a decade. According to Deloitte. 68% of these were set up after the year 2000, and women now serve as the principals of 15% of family offices worldwide. 

This combined wealth is set to grow from 5.5 trillion United States dollars (US$) today to US$9.5 trillion by 2030, a 189% increase. In comparison, SA’s entire gross domestic product (GDP) in 2024 was $400 billion. 

A shift in approach to wealth and legacy

While HNW and UHNW families are thinking about how to navigate a volatile economic environment and new regulatory complexities around succession planning, many are also considering how to put their wealth to good use in the world, in the form of impact investing, philanthropy, and holistic, values-based approaches to capital spend in their family businesses.

There is a growing trend within HNW and UHNW families to shift their thinking beyond wealth to legacy. While wealth is tangible and measurable, legacy is far more enduring and meaningful. It’s not just about what we had, it’s about who we were and how we made others feel. Legacy tends to come into focus when people start thinking about the bigger picture: the values they’ve lived by, the principles that guided them, and the relationships that truly mattered.

Creating a family story

So how do HNW and UHNW families create meaningful legacies? Clear communication, family charters, and purposeful financial education.

For these HNW and UHNW families, the next generation must understand not just the assets, but the values and intentions behind them. Sharing the story of how the wealth was built, the sacrifices, the decisions, and the guiding beliefs, helps ensure that what’s passed on is more than just financial. It becomes a legacy rooted in purpose, responsibility, and continuity. These kinds of realisations are driving a rising global movement toward purpose-driven wealth and storytelling within family offices.

Conversations around wealth, its purpose and its future must begin early. These discussions should include all individuals who are expected to participate in the family enterprise or benefit from its assets. Ideally, such dialogue should commence well before any formal transition of wealth takes place. When conversations get difficult, it’s prudent to involve an impartial and trusted advisor.

Bring young voices into the conversation

We’ve always believed it’s important to include the young voices in the family. That’s why we focus on creating space to collaborate, share ideas, and co-create what legacy looks like for the future. It’s about blending the wisdom of the past with the energy and insight of the next generation.

With many affluent families often choosing to live their lives as global citizens, with younger family members living and investing internationally, Smit says many HNW and UHNW families are opting for the establishment of offshore structures to support family succession planning and to protect assets such as property through effective, well-designed structures.

In a rising trend, many SA high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) who have lived abroad for many years in places like the United Kingdom (UK) are retaining their tax domicile or residency abroad, while spending more time in SA at their coastal properties or farms. These assets are frequently acquired through offshore structures for purposes of asset protection and strategic estate planning. Younger family members need to be included in discussions around the management and eventual inheritance of these assets, especially where structured investments are in place.

Putting measures in place to facilitate legacy building 

Research consistently shows that many affluent families struggle to preserve their wealth beyond the third generation, not because of poor investment decisions or external market forces, but due to internal dynamics and disagreements around business strategy. 

To mitigate these risks and foster long-term sustainability, families should adopt proactive governance frameworks that promote transparency, inclusivity, and adaptability. A memorandum of understanding, a family constitution, and a solid financial plan co-created with wealth management experts, coupled with regular family meetings, can serve as foundational tools to articulate a shared vision and establish mechanisms for collective decision-making.

Alongside these values-based discussions, it is imperative to ensure that robust and forward-looking tax planning is in place. The transfer of assets from one generation to the next can trigger significant tax liabilities, often as high as 50% in certain jurisdictions. Without careful planning, these obligations can substantially erode the wealth intended for future generations.

Conclusion

At Citadel, we believe that true wealth encompasses the values, purpose, and legacy that HNW and UHNW families cultivate and pass on. As part of this philosophy, we actively encourage the inclusion of the next generation in conversations about wealth, where appropriate, to foster education, engagement, and continuity of the family’s legacy.

* Smit is the advisory partner at Citadel.

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