These transgenerational intentions represent a unique nonfinancial objective that has temporal implications for strategic choices, including the innovation-spending decision. Controversy surrounds the question of how transgenerational intentions affect the innovation-spending decision: some emphasize the positives of a transgenerational time horizon for investments in long-term growth, whereas others point to the negatives of a conservative mindset with amplified concerns for near-term firm survival. Using a prospect theoretic mixed gamble lens, we resolve this puzzle by modeling the firm’s survival hazard in the form of its default risk as a key contingency factor. Based on a sample of around 5,000 German firms, we find that the effect of transgenerational intentions on innovation spending ranges from positive when the firm’s default risk is low, to negative as its default risk increases. This study advances insight on the role of temporal considerations and firm survival hazard in family-owned firms’ mixed gamble evaluations.