We spend a lifetime generating wealth and accumulating assets, but successful transfer to the next generations is based on careful planning.
1. Everyone has ideas and ambitions for their wealth
In my experience, it doesn’t matter how much wealth someone has, individuals will have at least some high-level thoughts on the purpose of their wealth in relation to their family and future generations. This is personal and often driven by experiences and relationships, but it is rare that someone would not care where their wealth may end up when they die.
There are often rather prescriptive rules that might direct how at least some of an individual’s wealth is passed on to family and children, this can be driven by habitual residence, domicile, nationality and in some instances religious considerations. It is therefore key that ideas and ambitions take into account these possible constraints in order for the outcome you had pictured for your hard-earned legacy to become reality. Building a vision and purpose for your wealth is a journey in itself that can last a lifetime and can require expert advice adaptable to changes – but, these are central to deliver a long-lasting legacy, which is more than just passing on money or property.
2. Careful planning to minimise conflicts
Minimising conflicts, preserving wealth and fairness are natural instincts for most. These can be very subjective concepts and driven by everyone’s life experience and can be affected by long-standing family dynamics. However, these are often key drivers in defining a vision and purpose and implementing a plan for a long-lasting legacy. External factors and local customs can also play a role especially around what is perceived as being fair by the wider society or what wealth should be preserved for. Additionally, where wealth comprises family businesses additional considerations are required, like the role that next generations will want or will be able to play when simply dividing up assets cannot be the answer.
3. Know yourself and your family
Ultimately, to turn a vision into a long-lasting legacy you need to be able to trust your family and next generations to do this for you. So, whilst succession planning might require some tough decisions, it is vital that you engage the next generations on your plans, ambitions and ultimately vision as this will be extremely powerful in carrying forward your legacy. Importantly, it will also be instrumental in getting to know everyone, their strengths and weaknesses, who can be trusted with certain aspects of your wealth over others, who can be empowered with difficult decisions down the line and also how much independent support might be required to get there. A search for skills, values and aspirations to support your legacy will help minimise conflicts.