Family charters are often introduced as a means of bringing structure and clarity to increasingly complex family wealth arrangements. Typically non-binding in nature, they sit alongside trusts, letters of wishes and constitutional documents, helping to articulate shared values, guide decision-making and provide a framework for continuity across generations.
At Delfin, we frequently see that governance alone is not always sufficient. Technical structures can define how decisions should be made, but they do not always address how those decisions are experienced. This distinction becomes increasingly important as families grow, diversify and transition across generations.
In this interview, we explore how a more psychologically informed approach to family charters can strengthen their effectiveness. Drawing on the clinical perspective of Dr Chantal Basson alongside Delfin’s, Annamaria Koerling, we consider how governance and family dynamics intersect, and what ultimately distinguishes a charter that is genuinely lived from one that remains largely aspirational.
What is the difference between a family charter and a psychologically informed one?
A family charter typically sets out the family’s values, aspirations, decision-making processes, and expectations around governance, communication, and continuity. It is often designed to provide clarity and structure.
A psychologically informed family charter goes further. Family values are thoughtfully and carefully co-created with curiosity and intentionality. These are the foundations on which is built an understanding that families operate relationally through emotion, identity, memory, power, attachment, and perceived fairness. The values allow layers of family understanding to be created, in which these concepts can be usefully examined and potential tensions mitigated against through the family charter structure. In other words, it recognises that conflict in family wealth systems is rarely just technical. It is usually relational.
So the difference is that a psychologically informed charter is not only asking, “What should the family agree?” It is also asking, “What is likely to help this family thrive and how do we use this agreement to make their connections meaningful, challenges tolerable, and relationships sustainable?”
What are the components of a psychologically informed family charter?
A psychologically informed charter would still include many of the familiar governance elements, such as shared values, purpose, decision-making processes, roles, communication expectations, and succession principles. But it would also be informed by a deeper understanding of how the family functions and wants to function as a system.
The values are created and discussed in a more psychologically driven way and deep dives within these values are helpful, to ensure they are, or can be, rooted in the family culture
That means it might include explicit attention to areas such as:
- How does the family want to create cohesion – how do they show up together, who, when, how, who decides.
- If there are family occasions, how are they handled, how are wishes for these communicated?
- When there are disagreements, how do family members want them to be handled.
- How partners entering the family system are welcomed and integrated and made to feel belonging in the family?
- How voice is given across generations
- How fairness is understood within the family
- How roles and expectations are communicated
- How family identity and belonging are maintained
- The mechanisms through which emotionally charged issues can be surfaced before they become entrenched
The important point is that the charter is not just documenting rules. It is creating a framework that the family can psychologically engage with. When events occur in families, the family charter can act as a guide to managing those events.
Is there groundwork that needs to be done with a family before a psychologically informed family charter is created?
Yes, usually there is. In many cases, the groundwork is what determines whether the charter becomes useful or merely symbolic.
Before drafting begins, it is often necessary to understand the family’s dynamics more fully: where trust sits, how conflict is managed, who feels heard, where there are old grievances, and whether there is enough psychological safety for honest conversation. Sometimes families are eager to move quickly to drafting because a charter feels constructive and orderly. But if there is unresolved resentment, role confusion, or strong differences in how family members understand fairness, those issues tend to reappear later and the family charter isn’t worth the time and effort used to create it.
The groundwork may involve structured conversations, careful listening, clarification of expectations, and sometimes some containment of existing tensions before a formal document is attempted. There is also of course, all of the formal organisational issues to manage around a family gathering for this purpose.
What should prompt a family to consider putting a psychologically informed family charter in place?
Ideally, a family should consider it before the grounds for conflict start to arise. The ideal moment is often while the first generation is still actively shaping the family’s culture and governance. This is also often when a family recognises that wealth is becoming more complex, generations are expanding, or decisions are becoming less intuitive.
Triggers might include:
- Planning for a transition from first to second or third generation wealth
- Concern about loss of connection in families due to global spread
- Increasing complexity in trusts, business interests, or family office arrangements
- Uncertainty about roles, voice, or decision-making
- Uncertainty / curiosity or tensions around fairness, contribution, or expectation
- Concern about possible future disputes rather than current crisis
- Recognition that the family needs a more intentional governance culture
A psychologically informed charter is particularly useful when a family wants not only continuity of assets, but continuity of relationships.
How can lawyers, trustees or trusted advisers recognise that a family may benefit from a family charter with a psychological framework?
That is a very important question, because trusted advisers can be the first to see the early signs.
Families may benefit when advisers notice recurring ambiguity that is not legal ambiguity, but relational ambiguity. For example, beneficiaries may be unclear not only about how decisions are made, but about whether they have a meaningful voice. Siblings may interpret the same trustee action very differently because they are carrying different assumptions about fairness, trust, or parental intention. A founder may say they want succession, while informally retaining all authority.
In those situations, the issue is not simply one of better drafting. It is that the family needs a framework that can hold both governance and relational dynamics together.
What types of disputes or tensions can these types of family charter realistically help prevent?
A psychologically informed charter cannot and will not prevent all conflict, nor should that be its promise. But it can increase cohesion to a level that reduces the likelihood that predictable tensions become destructive disputes.
In particular, it can help prevent escalation around:
- The imaginationships (The “imagined narratives”) that can occur in physically distant families and relationships.
- Sibling relationship challenges intensified by wealth structures
- Misunderstandings about roles and expectations
- Perceived unfairness in decision-making
- Intergenerational tensions around voice, responsibility, and legitimacy
- Confusion between formal authority and informal influence
- Resentment arising from confusion, exclusion, or inconsistency
What it does especially well is reduce the space in which assumptions become imaginationships and harden into grievance.
Are there situations where a charter is introduced too late — after positions have already hardened?
Yes. There are situations where a charter is introduced after conflict has become so entrenched that it is no longer functioning as a governance tool, but as a proxy battlefield.
Once positions have hardened, family members may engage with the charter defensively or strategically rather than collaboratively. At that point, every clause can become symbolic of an older injury or power struggle. The drafting process may still be worthwhile, but it often needs to be preceded by, in parallel with or lead to more direct relational work.
So whilst a charter can be introduced too late to function preventatively, it may still have value. The task is then more in the realm of dispute resolution and stabilising a fractured system and less about cohesion. .
From a risk-management perspective, how do you see psychological family charters contributing to litigation prevention?
From a risk perspective, their value lies in increasing connection, belonging, acceptance and overall cohesion within a family. They reduce ambiguity, aid in managing expectations, and increasing legitimacy thereby decreasing the potential intensity of conflict if it does arrive.
Litigation in family wealth systems is often driven by accumulated perceptions of unfairness, exclusion, opacity, or betrayal.
A psychologically informed charter can help by making explicit how decisions are approached, how voice is heard, how disagreement is managed, and what shared principles the family believes should guide conduct. It creates a framework in which conflict can be metabolised earlier, before it needs to be externalised into legal challenge.
How important is alignment around shared values before drafting begins?
It is very important, but it should not be romanticised. Families do not need perfect harmony before drafting begins, and in many cases they will not have it. What they do need is enough clarity and honesty to identify where there is genuine alignment and where there are meaningful differences.
The danger is when values language becomes aspirational but ungrounded. If a charter says the family values openness, fairness, and mutual respect, but members do not actually experience those things, the document can feel performative. That can deepen cynicism.
So values alignment matters, and it must be credible. The task is not to produce beautiful language. It is to produce language the family can recognise as true enough to live by.
In that sense, these charters are not simply relational documents. They are part of a broader risk architecture. A good psychological family charter spans both of these realms.
At what stage in the lifecycle of a family enterprise or trust structure is it most effective to introduce one?
The most effective stage is usually before the complexity of wealth structures begins to outpace the family’s relational infrastructure. That often means at a point of transition: as children become young adults, if a family starts to feel disconnected due to geography, as ownership or beneficial interests spread, as governance structures become more layered, or as a founder begins to think seriously about continuity.
In other words, the optimal moment is often when the family can still be proactive. Once significant conflict has already emerged, the charter may still help, but it is working against greater resistance.
The earlier opportunity is when the family still has enough goodwill to translate values and intentions into structure and mistrust doesn’t organise the system.
How does a psychologically informed family charter help as wealth transitions to the next generation?
Wealth transitions are not only financial events; they are profound psychological ones. They raise questions of identity, merit, belonging, authority, dependence, and freedom.
A psychologically informed charter helps by giving the next generation not only information, but orientation. It provides a clearer sense of family connection being more important than wealth, what the wealth is for, how wealth can be used to increase cohesion, how responsibility is understood, how participation happens, and how voice and accountability are balanced. It can also help older generations articulate intentions in a way that is less likely to be experienced as arbitrary or controlling.
If we had to summarise it, what distinguishes a charter that truly strengthens cohesion from one that merely documents intentions?
A charter that strengthens cohesion is one that the family can genuinely recognise itself in. It does not just describe how the family wishes to appear; it reflects enough truth about how the family actually functions, where it struggles, and what it is trying to preserve.
A charter that merely documents intentions may sound impressive, but it remains aspirational and external. A charter that builds cohesion creates a framework that family members can trust, engage with, and return to when pressure rises.
Ultimately, family governance documents succeed or fail not only because of how well they are drafted, but because of whether they resonate with the people who are expected to live within them. In complex family wealth systems, technical clarity is essential. When governance frameworks are developed with an understanding of the psychological dynamics within families (how people experience fairness, authority, voice, and belonging), they are far more likely to hold under pressure.
Increasingly, families and their advisers are recognising that designing governance without understanding the human dynamics within the family system leaves an important dimension unaddressed.
How do you see a family charter interacting with existing trust structures, letters of wishes, or constitutional documents?
A family charter should not be viewed as a replacement for existing legal or fiduciary structures, but rather as a complementary framework that brings coherence and clarity across them.
Trust structures, constitutional documents and letters of wishes each serve distinct purposes. Trusts and related documentation establish the legal and fiduciary framework within which assets are held and administered. Letters of wishes provide guidance to trustees, often reflecting the settlor’s intentions at a point in time. Constitutional documents, where in place, may set out more formal governance arrangements around decision-making.
A family charter sits alongside these, operating as a unifying articulation of the family’s shared values, long-term objectives and approach to stewardship. It provides context to the more technical documents, helping to explain not just what has been put in place, but why.
How does a well-drafted charter reduce ambiguity for trustees?
While trust structures and letters of wishes set out the framework and guidance, they can leave room for interpretation, particularly as circumstances evolve or where intentions are not explicitly detailed. A charter helps to reduce that ambiguity by clearly articulating the family’s values, priorities and long-term objectives.
In practice, this gives trustees a more consistent lens through which to exercise discretion. It can help guide decisions in areas such as distributions, risk appetite, succession planning and the balance between preservation and growth of wealth.
Although it is not legally binding, it strengthens alignment between the family and trustees, reducing uncertainty and supporting more informed, consistent decision-making over time.
While trust structures and letters of wishes set out the legal framework and guidance for trustees, they can leave room for interpretation — particularly as family circumstances evolve, assets change, or intentions are not fully articulated. A well‑drafted family charter helps reduce that ambiguity by clearly expressing the family’s shared values, priorities and long‑term objectives.
Crucially, the charter provides important context for fiduciary documents. Trusts are often established for specific assets or purposes, and letters of wishes are typically written with those particular circumstances in mind, reflecting the settlor’s intentions at a point in time. A family charter sits above these documents as an overarching policy framework, helping trustees to understand not only what has been put in place, but why. This broader context supports more coherent interpretation of individual trusts and related guidance, especially where decisions span multiple structures or generations.
In practice, this gives trustees a more consistent lens through which to exercise discretion. The charter can help guide judgement in areas such as distributions, risk appetite, succession planning, governance arrangements, and the balance between preservation and growth of family wealth, particularly where the formal documents allow flexibility or are silent on emerging issues.
Although the charter is not legally binding, it strengthens alignment between the family and trustees by anchoring decision‑making in a clearly articulated set of principles. This reduces uncertainty, mitigates the risk of inconsistent interpretations across structures, and supports more informed, consistent fiduciary decision‑making over time.
Have you seen situations where technical drafting of things like charters was insufficient because the underlying relational dynamics were not addressed?
Yes, this is something we have observed repeatedly.
A common pattern is where significant effort is invested in technically robust documentation—family charters, succession plans, trust structures—yet the underlying relational dynamics are not addressed with the same rigour.
One illustrative example involves a family with children from multiple marriages. The founding generation held a strong and principled view that all children should be treated equally. This intent was reflected clearly in the legal and governance framework: distributions were balanced, structures were symmetrical, and the documentation aimed to demonstrate fairness at the point of wealth transition.
However, what was not fully explored was whether the next generation shared this definition of “fairness”. Relationships between siblings were not equivalent—there were differences in upbringing, proximity to the family business, and emotional connection to the wealth. While the documents were technically sound, they assumed alignment that did not exist in practice.
As a result, when the structures became operative, they did not resolve tension; in some cases, they crystallised it. The focus had been on achieving fairness at a single future moment—typically upon the passing of the first generation—rather than building a shared understanding among family members over time.
In our view, this is precisely where a more physiologically and relationally informed approach to family governance becomes important. Rather than concentrating solely on the technical articulation of outcomes, it is often more effective to:
- Engage the next generation early in the stewardship of wealth
- Create forums for discussing values, expectations, and perceptions of fairness
- Define how family members will interact, make decisions, and resolve differences before transition events occur
The emphasis shifts from “what happens to the wealth” to “how the family functions in relation to the wealth”.
For more information about Dr Basson, please visit her LinkedIn profile
