This is completely made up.
That article links to a mention of the quote, which is "indeed 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams group wealth consultancy."
That's basically advertising language made up by a wealth management organization that got turned into a meme.
If you look, the stat is mentioned in that Time: Money article and then shows up on MarketWatch, NASDAQ.com, and a variety of other places. People cite it in articles, blogs etc. But when you go to the Williams Group's actual website, what they're saying is more specific:
"70% of estate transfers fail[citation based on their own research] (meaning the family loses control of the assets and the family is divided), despite having excellent estate planning, we help you beat these odds by putting in place a strong foundation of family relationships."
So "fail" simply means there's not a direct one to one transfer of wealth and its split between heirs and other claimants or assets are liquidated.
There's a similar claim that pops up in blogs citing research by the National Association of Estate Planners and Councils Journal of Estate and Tax Planning where they mention the 70% stat. When you go to the report in question, it says "70% come unglued." Unglued is defined in the report as the pot becoming split, disrupted mostly over family squabbles. Then, using that "unglued" idea as a synonym for failure they proceed to look at interviews of their customers (they never say people whose estates failed or specify wealth levels, so we can assume the entire sample is just a mix of people who had estates and were their customers). They "conclude" from the interviews that poor communication is a common problem, then leap to the conclusion that since a lot of people talked about poor planning in their qualitative research, then that must explain the estate failure. Their recommendation? Exactly what you'd expect from a trade journal for wealth management professionals: Get a wealth management plan with a qualified professional.
For a more rigorous treatment of wealth transmission and how it actually works in society, what impacts it has across generations, see a review of past lit and findings in "The Inheritance of Inequality" (Bowles and Gintis, 2002) or some modern empirical work in "Generations of Advantage. Multigenerational Correlations in Wealth" (Pfeffer and Killewald, 2018).
