➡ Many people accumulate wealth but don’t plan for its management after they’re gone, leading to loss of wealth by the third generation. This is not due to lack of money, but lack of instructions and values passed down. To prevent this, it’s important to create a ‘family constitution’ that outlines your values, vision, and rules about wealth. This document will guide future generations in managing and preserving the wealth, ensuring it doesn’t disappear.
➡ The text discusses the importance of passing down not just wealth, but also values and systems to future generations. It emphasizes the need for a family constitution that outlines the family’s vision, values, rules for wealth stewardship, and governance. The author suggests using an AI tool to help create this constitution, but also encourages brainstorming and collaboration with your spouse. The final document should be a conversation with future family members, including personal stories and values, and should be updated as needed.
➡ It’s important to create a family constitution, a document that outlines your values and plans, and share it with all adult family members. This document should be updated regularly and consulted during major decisions. It’s also crucial to involve your attorney to ensure it’s included in your trust. Remember, true generational wealth is not just about passing down assets, but also values and the system that created the wealth.

Most people spend their entire lives building wealth and they never once think about what happens to it when they’re gone. You know, they just assume that their kids are going to figure it out. They assume that the lawyer is going to handle it. They assume that the money just transfers, but it doesn’t. 90% of wealthy families lose everything by the third generation. And it’s not because the money wasn’t there. It’s not because they picked the wrong investments. It’s because they passed down the assets, but they didn’t pass down the operating system. So I’ve built to make sure that my wealth doesn’t die with me.

I want to show you how you can do the exact same thing. And it starts with something most people have never heard of. Are you ready? Let’s go. All right. Now to start this off, I want to kick it off with just a personal story. If you follow along, if you watch my Instagram, by the way, if you don’t, there’s a link down below, but you’ll see that I travel around the world. I do a lot of crazy things. Last week, I was jumping out of helicopters in Canada. And this week coming up, I am riding my dirt bike across the desert of Baja down to Cabo San Lucas.

And so my wife, she’s like, man, you know, like, I’m worried, like, what happens if you disappear? Like, what happens if something happens to, right? What happens if I don’t come back? What does my family know about the wealth? How do they know what to do? How do they manage everything that we’ve built? So of course, like we have life insurance, and we have money, and we have assets. But like, where’s the instructions? Is there a document? More importantly, are there a set of rules? Or do they just get the money, and they don’t have to do with it, they spend it, and then it’s gone.

There’s a saying, shirtsleeves to shirtsleeves in three generations. What this means is that we have the first generation that they earn it, right, they build all that wealth, they build the machinery, right, the second generation, typically, a lot of times, hopefully can maintain that. But by the time it gets to the third generation, they completely destroy the wealth. And the thing is, is it’s not a money problem. It’s not that the money runs out. It’s an instruction problem. It’s an operating system problem. It’s a values problem. Now, there’s three reasons why wealth dies, all right.

First, there’s no rules. So every decision that they get is just emotional, they get the money, they don’t have to do it, they didn’t earn it, they don’t respect it. And so there’s no written principles about that. The second reason is there’s no structure, right? So the person didn’t earn the wealth, they didn’t build the system that generated the wealth, and everything that lives in the person’s head just died. And so what happens is, when they die, then things go a lot of times into probate court, maybe into legal battles, taxes start destroying it, all of those things.

Another true personal story here, my sister, unfortunately, her husband died when her kids were just very young. And I had to watch her go through this firsthand. It was terrible. It’s a nightmare that you don’t want to have to go through. It’s crazy how much the state will fight you over assets that you basically own, right? You’re married, right? You should have those assets. It’s a complete nightmare. And so you don’t want that to happen. Now, the third one might be the most dangerous one. And it’s not because there’s not enough money.

And it’s not because of probate, maybe you have the will, you have the trust, whatever. But the most important one is the identity transfer. You see, what happens is, I have built a system for my assets to continue to multiply. I have built a system where my taxes don’t get paid to the government, they buy me more assets, and my assets pay for my life. And that can go on in perpetuity. And in the second generation, or the third generation, those assets will be worth so much money. But if my heirs don’t know about that system, they just see the money.

They don’t have the identity. They get the balance sheet, but they don’t get the operating system. That’s the problem. We need to make sure that identity gets passed down. And don’t worry, there’s an exact step by step process. I’ll walk you through how to do that. But real quickly, if you just think about this for a second, think about your kids, think about how well you’ve trained your kids. But more importantly, think about this. Think about your grandkids. I’ve heard that the side of a good father isn’t how well their kids behave.

It’s how well their grandkids behave. Think about that, right? Did I teach my own kids good enough to teach their kids? That’s the real question. And how do we do that? Well, we give them a set of instructions, which we’ll come back to. You see, most people think about estate planning. And again, they think about the wills, and they think about the trust, and like, yeah, I wrote something down, it’s in my safe. Yes, I have an attorney, right? That’s the asset transfer. But again, what we want to talk about is the legacy transfer.

And what is the legacy? The legacy is me, it’s my values, it’s my vision, to my principles, to my rules. And I don’t want to say my, my, my, but like, I’m the one that had those values vision, I’m the one that had those principles, I’m the one that had those rules that created the wealth in the first place. So it only makes sense that those values should be passed down to the next generation, if they’re going to manage it. Okay, so let’s break down exactly how we do this. And I do it through something I call a family constitution.

Now, the family constitution can be very simple can also be much more complex. As a matter of fact, I’ll give you a tool if you want to do this on your own at the end. But a family constitution is basically a written document. Think of it like the American Constitution, the greatest constitution ever made, but it’s a document, and it codifies your family’s values, all right, it basically spells out what your values are, what your long term vision is, all the different rules that you have about how you’ve built the wealth, how you use the wealth, how the wealth should be transferred, all of those things.

All right, now, what are some of these rules that should be there? What are some of these principles? Well, it comes down to what you want your values to be. How should you pass those down? More importantly, like, how do you view the world? So for example, do you value health? Well, maybe you want to make sure that your heirs value health. Do you want to value giving? Well, then maybe you should value it. Do you value education? Do you value faith? What are these values that help guide your decisions? And then we can write those things down.

How did I build the wealth? What do I think about wealth? For me, it’s not just about money. The reason why I only the only reason why I care about money is I want to give my family more options. And I want to help more people. So I wouldn’t want to give money that would contradict those things. I wouldn’t want to give money to my heirs that doesn’t give them more options and doesn’t help more people. I don’t want them to be lazy sit on a couch getting paid to do nothing.

That would be contradictory to all the values that I have. I want them to prioritize health. I don’t want them sitting on the couch, drinking soda, watching Netflix. That would be against my values. How can I make sure that a certain percentage of that wealth gets donated to the charities of my choice? For example, I told you one of the things I’m going to be doing is riding my dirt bike across the desert down to Mexico. And over the years, I’ve been doing that over two decades now, I give back to many charities along the peninsula.

That’s been my life. Well, I kind of want my money to continue to give to those. And so maybe that should be in the Constitution. You’re starting to get the idea. Okay, so that is the structure. First of all, I want to make sure that I’ve built the system. And I don’t just pass down assets, but I passed down the system. And the system has a constitution or set of rules. One of the families that you hear about the most, they’ve been able to pass wealth down from generation to generation longer than any other family in history.

I’m talking about the Rockefellers, you’ve probably heard of them. And they didn’t just pass down capital, right? That’s not how it worked. All the other families, the Carnegies, whatever, they lost their money. But the Rockefellers, they pass down frameworks, they pass down rules, they pass down the operating system. As a matter of fact, JD Rockefeller, the founder of them, he wrote 38 letters to his son. It’s amazing read, you should check it out. Each one of those life lessons was education, and contribution, contribution requirements, structural rules. Now, again, other families like the Vanderbilt’s, they had more money at the same time, but they lost it all.

All right. Now, in order to do this, in order to pass this down, there’s three layers that you want to think through. And there’s three layers in there. So the first one is going to be your vision and your values. All right. So this answers who we are. Who is the Moss family? What does the Moss family stand for? What are the values that we have? We’re, you know, we’re adventurers, we’re caregivers, we’re truth tellers, we’re a family of faith, right? All of those things. Who are we as a family? Why do we build wealth? What do we believe about money? What do we believe about stewardship? What do we believe about creating value? What do we believe about giving back to the world? Why do we build wealth? So I want to build all of that into the vision part, who we are, why we want to build wealth.

Think of it like I’m leaving a letter to my heirs, right? I’m going to give this to my kids, but I’m going to give it to my kids, which will give it to my grandkids or my great grandkids who may never even know me. So it’s like, these are the things that I believe made me who I am today. These are the things that I hold important in the world. These are the things that I want you to know. And if you don’t live up to those values, then like the soup Nazi in Seinfeld, no money for you.

So those core values, they should be codified. They should be written down, right? They’re written down in code. They’re written down so everybody can see those. Okay. So now this layer becomes the lens. So when someone wants to start a business again, if they want to take a risk, they want to spend family capital. We’re going to argue about their opinions, right? They’re going to reference what the values are. Okay, then the next layer we want to go through is the rules of the wealth around the stewardship of the money. And kind of more importantly, like how is the wealth supposed to be used? So this would be principles on the wealth stewardship.

So my investment philosophy, how I think about spending and consumption rules. So for example, we never sell assets to pay for consumption, right? That’s one of my core rules. We only sell assets to buy more assets, for example, a charitable giving how much of that wealth should be given to charities, what type of charities should we do that for? Now, there’s three never break rules that I like to think about in my own personal constitution. This is for me that have to be for you. But again, as I said, we never sell assets, right? If we need liquidity, we borrow against our assets.

If an asset sold, then we rotate it into another another asset, we never consume it. As a matter of fact, as I wrote out instructions for my wife and my kids, I have one set of instructions for my wife, I have another set of instructions for my kids. If my wife and I were to die, it’s like, open this call this phone number, here’s a set of instructions. But it’s like, here’s how much cash flow is coming in, you can take this money and create more cash flow here. If you need more cash flow, you could borrow against at this asset and put it here for even more cash flow.

And then if you need even more cash flow, which they never would, then you can take these assets and bargain stuff. I’ve laid out this whole set of instructions for them to follow if they want to do that. But we never consume the assets. Again, use life insurance, use your assets, build more life insurance if you need to, whatever you can do to get that done. All right, then we want to have the declaration. And there’s a difference with the declaration and articles, right? So the vision is like a declaration of independence. But what are the specific articles that will make it true? So like, we pursue our goals with persistence and discipline, right? Sounds great.

What does that look like? We want to operationalize the world. If I had persistence, or if I had discipline, what would I be doing? How would a trustee, two, three, four generations later, how would they know if that’s true, right? Who want to make sure that all those values are measurable, right? We don’t want it just to be fluffy words that seem like they’re saying something, but really don’t say anything at all. Okay, then the third layer is governance and evolution. This answers, how does this thing actually get used over time, right? Governance is who manages it, who gets the voting rights, who gets to be the trustee or pick the trustee, who gets the votes, we want to lay out what succession plans are, like rules that the heirs must use to plan for the next generation succession.

We want to think about how the constitution can evolve without being completely gutted, sort of like what’s happening to the US Constitution. But this is not Moses writing on stone tablets, you can change it, you can change it from time to time. As things change, feel free to change it. It’s part of the reason why the inheritance isn’t just the assets, the inheritance is passing down the system. So I have a set of rules, as I kind of said, laid out like, hey, turn this into cashflow here, here’s the ways we’d use cashflow, borrow against asset, but shoot, in five, 10, 15, 20 years, that might not be a good strategy anymore, which is why you don’t want to just pass down the assets, not even just the system, I need to pass down the thinking, I need to pass down the values that created that system so it can be fluid.

Okay, now, if you’re watching all this, and you’re thinking like, hey, this is great, I want to do this, but I don’t know where to start, or, you know, I’ll get to it when I have time, or I’ll talk to my attorney about it. Well, I built something for you. It’s a family constitution planner, and it’s an AI bot that I built. And basically, it’s just going to walk you through each layer, and it’s going to interview you. It’s going to ask you one question by one question by one question, it’ll format the whole thing, and then give it back to you.

I’ll give it to you for free. There’s a link down in the description down below. But if you want to do this on your own, the first step would be, pull out a piece of paper, open up a word processor, Google Docs, whatever, start with a blank piece of paper, write down just your thoughts, just start brain dumping, right? Now, I might do this without doing this first before I even start with AI. The reason why is sometimes AI puts things in your head that maybe shouldn’t be there, sort of like Inception, that it planted in your brain.

So I like to start with sort of my own brainstorming first, write down a couple things that I have that are important to me, write those down. All right, then step number two is do it with your spouse. Do it with your spouse, but what I would do is have them do it separately. So I don’t want to influence my wife’s thinking or vice versa, have them do it together, and separately, and then come together with it, right? I want her input, she wants my input, but I don’t want them to go together.

I don’t want us to proceed. I want to make sure that we’re growing together, not apart. And then step number three, then we can go into the AI tool. All right, so we use AI as a brainstorming partner, the family constitution planner, the AI that I put together, it’s going to walk you through it question by question, it’s going to walk you through all the layers, it’s going to format all into a clean document. And then finally, step four, it’s important. So put it on your calendar, block out some time. I don’t know, give yourself an hour, something like that.

It’s not a form, it’s a conversation with your future family. Think about how I’m talking to my future heirs. Step number five, once you get it and it’s formatted, read it out loud. Read it because someone else is going to be reading the future, edit it, add some stories to it, add some of your personal stories so they can get to know you, make it sound like you. It’s not a legal document, okay? Now the urgency is that life isn’t guaranteed, tomorrow’s not guaranteed. Anything can happen to you at any given time.

So it’s better to have anything, it’s better to have something than nothing, okay? So again, tomorrow’s not guaranteed, get this done, like I don’t know, get it done on Saturday, and then make it real, okay? The family constitution is completely useless if it just sits in the AI or it sits on your computer. So you want to make it accessible, print it out, bind it, give copies to all the adult family members, store a digital version, reference it, whenever big decisions come up, pull it out, ask if I should update my values, if I need to change it in my plans, if I want to change what the family culture is about, anything like that, and then make sure, you know, hopefully you have an attorney, get it with your attorney, okay? Make sure it’s in your trust.

The trust structures, they’re tools, they’re living trust, they’re irrevocable trust. Of course, you can do LLCs, family foundations, whatever, but make sure all of this is with your attorney. So again, if something happens to you, there’s a phone number they can call, and they can get the whole process going. All right, so you get the idea, right? True generational wealth is passing down values. It’s not just the money, right? It’s the values, it’s the system, right? It’s the tools so they can have all that, all right? So don’t pass down the assets, pass down the machine that made it, that keeps it.

The instruction manual that keeps all of it running, make sure they get that too. And of course, go grab that family constitution planner, the AI thing that I built, it’s the link in the description, block out an hour, get that done. And that’s what I got, all right? To your success. I’m out. [tr:trw].

See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.