To Buck the Third-Generation Curse, Focus on the Family Story
The key is to motivate generations two and three to contribute to the family business in a productive way. You can look to Lawrence Welk's family as a prime example.


Telling the family story is an important part of transferring your legacy to the next generation.
The third-generation curse recognizes that very few family businesses survive beyond the third generation, and telling the family story may help break this curse.
The first generation sacrifices, risks and works to create the family business, recognizing that, despite their skills and hard work, there is always an element of luck with success.

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The second generation experiences the lack of significant wealth in their younger years and observes the hard work of their parents as they build the family business. Later, they enjoy the wealth earned by their parents and, when they take over the business, by them.
But the second generation often does not need to overcome the same risks and make the same sacrifices as the first generation did to achieve success. The second generation may feel, or begin to feel, entitled to the wealth, not fully recognizing the need to work hard every day to maintain it.
By the third generation, the family wealth earned by the first generation often is substantially lost. The initial “knee-jerk” analysis may conclude that the second and third generations may be lazy or less motivated.

John assists business owners, real estate owners and successful families to achieve their enlightened dreams by better protecting their assets, minimizing income and estate tax and resolving messes and transitions to preserve, protect and enhance their legacy. John is one of few California attorneys certified as a Specialist by the State Bar of California Board of Legal Specialization in both Taxation and Estate Planning, Trust and Probate.
However, the loss can happen for many reasons. For example, the older generation may fail to support new ideas, causing the most talented family members to go elsewhere.
The older generation also may address their concerns about the next generations by using restrictive trusts in their estate plans to limit the younger generations’ access to wealth.
Such an approach may not encourage the young generations to become the productive, responsible adults they need to be to lead the family business into the future.
A better approach would be to consider how to motivate generations two and three to contribute to the family business in a productive way.
The study Good Fortunes: Building a Hundred-Year Farming Enterprise, by Dennis Jaffe of Wise Counsel Research, suggests that owners of businesses that are successful for generations two and three recognize, foster and develop the younger generations’ contributions.
How to motivate the younger generations
An important way to encourage and motivate the younger generations is by telling the family story, a strong and continuing reminder of the work, risks and successes of generation one.
One of the best examples of how sharing the family story can work to inspire multigenerational success and wealth can be found in the Lawrence Welk family.
Welk was one of the most famous bandleaders of his day. I remember watching reruns of The Lawrence Welk Show with my mom and dad. He was part of a family of eight children born to German immigrants who lived on a dairy farm in North Dakota.
Welk worked the farm with his parents and siblings until his 21st birthday. He then left with an accordion, the clothes on his back and a fourth-grade education. He spoke only German at that time, learning English shortly thereafter.
He played his accordion anywhere he could, starting with barn dances. He began to play on local radio and then at popular dance halls throughout the country.
In the 1950s, The Lawrence Welk Show was born, becoming so popular that it prompted the term “champagne music.” Welk continued the weekly Saturday night show for 30 years.
Welk never forgot his roots and said that he learned to work and “live according to God’s laws.” He was known for many acts of kindness and generosity both before and after his worldwide success. In one famous story, he gave his shoes to a person in need after a performance.
At Christmas in 1966, Lawrence Welk’s family joins him on “The Lawrence Welk Show.” Back row from left: Lawrence Welk Jr., Fern Welk, Shirley Welk Fredricks and Robert Fredricks. Front row: Laura Welk, Robbie Welk, David Welk, Jonathan Welk and Lawrence Welk.
A foundation is formed
Welk formed the Lawerence Welk Family Foundation in 1960. His daughter Shirley later became the president, and other family members made up the board. The family met regularly, and members received financial and other necessary education about the foundation.
As years passed, the Welk siblings established a youth board to give younger kids an independent voice in planning their summer vacations.
A summary of the foundation, prepared by the National Center for Philanthropy and Youth, shows the involvement of four generations of the Welk family and supports my theory that the Welk family worked hard to develop multiple generations of responsible, successful family members.
Welk kept his family story — leaving the farm with his accordion, the clothes on his back and the dream to play his music — alive and well. His success was all the more incredible because he did not speak English when he first struck out on his own.
The Welk family story also includes later generations who have brought great financial success to the family and have had great success in helping those in need through the family foundation.
While we do not have much information about the Welk family’s wealth, we do know that Marriott Vacations Worldwide bought Welk Resorts in 2021 for $485 million. Amazing success from very humble beginnings.
A key moment to share the family story
While telling the family story to younger generations early and often would be ideal, one of the most overlooked moments to share the family story is during the memorial services for the first generation. This is particularly true for high-net-worth families.
The experts at the Frank E. Campbell — The Funeral Chapel have handled the final services for many high-profile and high-net-worth families, including John Lennon, Judy Garland and Malcolm Forbes. The evolving family story would be continued in the services for future generations.
William Villanova, president of the funeral home, notes that we make important decisions throughout our lives — where we go to school, live, vacation, where we get married, where we establish our businesses and how we manage them.
He says that similar consideration should be given to these final services, which provide an important and unique opportunity to mindfully share the family story with future generations, key employees and even the public.
Villanova also notes that, when planning final arrangements for people of means and public figures, the use of a nondisclosure and confidentiality agreement is an important tool to provide additional protection and peace of mind.
Villanova has seen firsthand how important it is to share the family and business story with future generations, an often overlooked, but critical part of the family succession process.
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Founder of The Goralka Law Firm, John M. Goralka assists business owners, real estate owners and successful families to achieve their enlightened dreams by better protecting their assets, minimizing income and estate tax and resolving messes and transitions to preserve, protect and enhance their legacy. John is one of few California attorneys certified as a Specialist by the State Bar of California Board of Legal Specialization in both Taxation and Estate Planning, Trust and Probate. You can read more of John's articles on the Kiplinger Advisor Collective.
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