Hermes, a valuable firm, is an example of how brand value can be preserved by keeping it under family control. Others prove that the family connection can help restore belief in a damaged brand — Toyota after its unintended acceleration crisis in 2010 is an example.

These cases aren’t typical.

Every family business succeeds at transferring ownership from one generation of the family to another. However, it is likely that many family businesses will fail because they did not plan for succession. Kevin O’Leary, an entrepreneur, said that one of the greatest mistakes made by successful founders of first generation businesses is when a matriarch of the family makes the right decision to transfer the business to her children.

This is a serious problem given the high number of family-owned businesses around the globe and in the U.S.

Most American companies are private, small or medium-sized businesses. This is despite the fact that many of them were established by one person and become very popular. O’Leary believes it’s important to consider the relationship and not only the financial aspect when starting a business.

“I have seen it happen in my portfolio… It’s heartbreaking when people from the same family tear the family apart.” O’Leary said at a CNBC eventAugust

Family succession is often affected by this breakdown, which can lead to loss or erosion of the wealth that was created by the founder.

It’s not uncommon for businesses to be wildly successful due to the founding father or mother, who may have exceptional operational skills but might lack the execution skills of the succeeding generation. O’Leary stated that American wealth is often lost in four generations.

According to leadership experts, family businesses are studied by people who were raised in them. there’s truth in O’Leary’s warningLearn about the emotional-charged and unique risks of succession planning for family businesses.

O’Leary stated that “great business leaders” have learned how to create infrastructure, regardless of whether it is within the family, or when professional ranks are better.

Children are not denied the right to inherit wealth from their families or to participate in its preservation. However, they may be unable to develop the necessary skills to manage a business. O’Leary noted that founders who are successful know when to make covenants for professional managers to oversee the business and keep children on the board.

Berkshire Hathaway is a prominent American example. Warren Buffett isn’t likely to choose one of his children to succeed him, although he has been a director on the company board since the 1980s with his son Howard. He recently joined the board to keep the “culture” alive. Peter Buffett, Buffett’s youngest son is the director of The Susan Thompson Buffett Foundation. This foundation manages Warren Buffett’s charity giving.

All three of my children dedicate themselves to the preservation of the local culture.” Buffett told the Omaha World-HeraldLast week, after the most recent earnings report. They are dedicated to this.

O’Leary states that, in most cases that he’s witnessed, founders who claim they’re handing over their business to children don’t possess the same skill sets they did when starting it.

He said, “That is how businesses lose their value in just few generations.” It’s time-proven. It’s history. “Executional skills can be very difficult to find.”