If you’ve ever sat across a desk from a solicitor or financial planner, discussing nil-rate bands, discretionary trusts or the seven-year gifting rule, you’ll know the feeling. The conversation is serious, the fees substantial and the objective clear. Preserve as much of your wealth as possible for the next generation.
But what if the thing you’re trying to preserve is the least durable part of your legacy? Gregory Clark, a British economic historian at the University of Southern Denmark, has spent decades following family fortunes using a database of more than 434,000 English people carrying 494 rare (and therefore easy to track) surnames, from 1600 to the present day. In a working paper with Neil Cummins from the London School of Economics last year he made use of a clever natural experiment.
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Before 1880, English couples had no reliable means of controlling family size. Whether you had two children or eight was a biological lottery. A wealthy man with two sons left each child a substantial inheritance. An equally wealthy man with eight sons left each child a fraction. Their starting positions were determined by chance, not by anything their fathers did differently.
Clark and Cummins traced what happened to those windfalls. By the grandchildren’s generation the effect of the original wealth had become statistically insignificant. By the great-grandchildren it had vanished entirely. As they put it, “In the long run, wealth mainly derives from sources other than inheritance itself.”
What money can’t pass on
So if inherited wealth fades within three generations, why do some families stay wealthy for centuries? Clark addressed that puzzle in an earlier study, published in 2023, tracking 422,374 English people from 1600 to 2022. This time he measured not just wealth but broader markers of social standing: education, occupational status, property values and literacy.
The persistence he found was extraordinary. Social status declined only slightly between generations on average, and far slower than conventional measures of social mobility would predict. Even fourth cousins showed statistically significant similarities in their life outcomes. Compulsory education, the welfare state, progressive taxation: four centuries of social upheaval had not shifted the rate of decline in any measurable way.
One finding stands out. Sons who lost their fathers in childhood showed exactly the same consistency in social status as those whose fathers survived into old age. Whatever was being transmitted across generations, it wasn’t simply parents teaching their children directly. It appears to work through something closer to absorption than instruction: the financial culture of a family, soaked up long before any deliberate lesson is given.
Think of it as a distinction between two kinds of inheritance. One is the cash itself, a depreciating asset that, as Clark’s research with Cummins suggests, dissipates quickly. The other is what you might call a family’s financial DNA: the attitudes to risk, the instinct for accumulation, the habits of financial discipline that produced the wealth in the first place. The cash has a half-life. The financial DNA replicates.
Researchers disagree about precisely why status persists so stubbornly, and that debate is far from settled. But the pattern itself is not in dispute: something far more durable than money travels down the generations.
The real inheritance
Clark and Cummins’s data contains one more detail worth dwelling on. Children born into larger families, who inherited less each, didn’t simply end up poorer. They actually accumulated more wealth over their lifetimes than their inheritance would predict. Those who inherited less compensated for it. Those who received the largest windfalls, by contrast, tended to die with less than you would expect. Easy money, it seems, is no substitute for the habit of earning it.
There’s a famous exchange, probably apocryphal, between F Scott Fitzgerald and Ernest Hemingway. “The rich are different from you and me,” Fitzgerald said. “Yes, they have more money,” Hemingway replied. Clark and Cummins’s research suggests Fitzgerald was the truth teller.
So the appointment with the solicitor isn’t wasted time. But it’s only half the picture. The other half is less formal and rarely costs a penny. It’s whether your children see you make financial decisions calmly, whether they ride out a market fall with you rather than watching you panic, whether the family treats money as something discussed openly or something never mentioned at all. It’s whether you involve them in real choices, not just pocket money but the conversation about why you picked one pension over another, or what you weighed up before remortgaging.
For grandparents the opportunity may be even more direct. Opening a Junior Isa and letting a grandchild watch it grow, explaining what the stock market is or simply talking honestly about your own financial mistakes: these are small acts, but Clark’s research suggests they belong to the category of things that compound across generations. A £5,000 gift will probably be spent. A habit of thinking clearly about money has a longer shelf life.
Your children will probably forget the details of your will. They’re far less likely to forget any of that.
The financial DNA, it turns out, is the legacy that actually lasts.
Robin Powell is a journalist and campaigner for change in investing