Money becomes the medium of exchange among family members, so they focus on it and ignore deeper and more important values. Family wealth should stimulate and provide opportunities for members, without having a corrupting influence. This is the view of Gerald Le Van, founder of the Le Van Company, family wealth mediators.

“The ultimate act of love is for the older generation to prepare the younger generation for the kinds of struggles that wealthy people face,” he says. “They have a different set of problems and solutions and they must learn that just throwing money at a problem won’t provide a cure. In turn, the younger generation must be responsible, listen, explain their goals, their needs and how they propose to live and must not expect everything at once.”

According to Mr Le Van, problems are much more acute in newly wealthy families. “Those with three of four generations of wealth have worked out the issues,” he says. “Problems arise with highly successful entrepreneurs who have just sold their business and worry about whether their children will have the same work ethic or if they will be affected by drug-taking.”

He says that corruption arises when people decide not to work or are not stimulated or challenged to work. There is a “lucky sperm club”, whose members feel that they were born to wealth, are entitled to it, should have it and nobody should question it.

A family’s most important non-financial asset is its “relational estate”, which is a combination of genes, history and heritage. The importance of genetics in family relationships is being confirmed in studies of separated identical twins. History is the family experience, which varies between individual members. Heritage is a combination of meaning and values, and influences the way the family thinks of itself and how it presents itself to the outside world.

“Those three areas are all connected by relationships of family members with each other over a number of generations,” says Mr Le Van. “They may be influenced by the life of someone who died 50 or 100 years ago, whether the founder of the fortune or simply somebody who set the style for the family.”

It is because families do not recognise or address this relational estate that problems arise. Mr Le Van finds that the biggest problem is succession in the family business. How and when will it be passed to which members of the next generation? Should the business be sold or should non-family management be brought in? How should it be owned and how should income be distributed?

The next is selection of trustees, executors and other advisers. “It is very sensitive,” he says, “because there are always complaints about their performance, particularly from beneficiaries who are dependent upon inherited wealth and who feel entitled to it, like royalty.”

Another source of family conflict arises from ageing. Mr Le Van explains that as they get older, people want financial security, attentive healthcare, peace in the family and to be well, or even lovingly, remembered. These must all be addressed before control can be handed over.

The way to prevent many of these problems arising is to set up a family council. This is not a legal entity, but a group of blood relatives with a direct line. Some include spouses, but without a vote. Aunts and uncles are only included if they are substantial holders of wealth and younger members are included from 18 or 21.

Its functions are to keep members informed of family issues, both financial and non-financial, such as births, deaths, needs and accomplishments, to give and receive advice and to make decisions. The family council must review the work of trustees, executors and managers of family companies.

“Communication is the biggest problem in many families,” says Mr Le Van, “because they are afraid of conflict or that control could be lost. Control is a huge issue in wealthy families, affecting wealth, people’s lives and their position in life. People simply do not want to let go and the younger generation then inherits wealth without understanding the philosophy or history behind it, so they make a mess of it.”

Entrepreneurs are acutely focused on growing and managing wealth, so it occupies a great deal of their conscious day. It is never enough, they are never satisfied with what they have and must go on and make more.

“It is a powerful idea,” says Mr Le Van, “but it is not greedy, negative or immoral, it is just a mindset that we have to understand.”

In contrast, Mr Le Van is concerned that if the emphasis is on preservation of wealth, rather than its creation, it merely puts off its eventual decline. One of the main tasks of family councils is to grow the family wealth by encouraging reinvestment in an entrepreneurial mode.

The family council will then be able to plan the future of family wealth. Who will own it, who will control it, who will make decisions, how will it be invested, who will enjoy it, how will needs be recognised and satisfied, how will it be distributed and who will be penalised for what kind of conduct? This goes against the tide of a great deal of history in which owners of wealth have addressed these issues in secret.

“Lack of productive communication is usually at the heart of family disputes and has caused a great deal of hurt, harm and despair,” concludes Mr Le Van. “A family council is the best way to prevent the kind of ugliness that we see amongst wealthy families. If they organise themselves they will be healthy financially, psychologically and relationally.”