I've heard it said of millionaires that the first generation earns it, the second generation grows it, and the subsequent generations spend it. That has been, pretty much, a reflection of what I've seen, although sometimes the second generation is so deep into drugs and alcohol that they burn through a lot of the capital before the third generation gets their chance to spend much of it.
I know a guy whose family sold their business for around $40M. He is deeply into drugs and alcohol. His older sister was also deeply into drugs and alcohol, but she died in her 50s. His younger brother is also deeply into drugs and alcohol, but lives the life of a ski bum and mountain biker, winters at Grand Targhee followed by northern hemisphere summers at Thredbo. The brother that I know spends money in amounts that make you shake your head. Private charter jets to Europe. Private yacht charters on the Caribbean and Mediterranean. At one time he had a Saracen armored car. He has at least 6 houses or condos in places like Telluride, Palm Springs, and Palm Beach that I know of that he pays caretakers to maintain. He has 2 daughters who are in their 20s, but he doesn't take care of them because they remind him of his first, of four, failed marriages. He is toxic, living proof that money doesn't buy you happiness.
If I had generational wealth and my kids were irresponsible, I'd put a fair portion of it into a professionally managed trust for each of them that would make distributions in amounts that would allow them to have comfortable lives, but not be able to piss away the capital.
"Shirtsleeves, to shirtsleeves, in three generations."
