Specialist providers of dedicated succession planning solutions, including wealth preservation and distribution of family wealth.
Many people spend their working lives building their wealth with great care. Yet the same care is sometimes lacking when it comes to preserving and passing on that wealth so that future generations can benefit. That is where proper succession or estate planning is so essential.
Simply put, succession planning is the creation of a definite plan for managing your wealth while you’re alive, and distributing it after your death. It encompasses three distinct elements: wealth accumulation, wealth preservation and wealth distribution.
Succession planning can range from simply holding assets in trust so as to avoid the delays, expense and publicity of probate applications. Alternatively it can be used to ensure the smooth transmission of assets from one generation to another, right through to sophisticated arrangements for the long term preservation of family wealth including business assets across jurisdictions and across generations.
Transmission of assets
The smooth transmission of assets is perhaps the most important element. A large majority of businesses are privately owned and many of them are of substantial value. With the right succession plan the family business can pass seamlessly to the next generation or, if required, the fruits of that business can be separated out from its management and control.
Managing asset protection
Asset protection is also importantly linked in the widest sense since secure and effective succession arrangements provide a good defence against attacks on wealth, which come in many forms. Tax is an example of this, but possibly even more important are disputes within the family, disputes with former partners, disputes on the breakdown of a marriage – whether that of the settlor or of his children.
A well planned and well structured framework for the long term preservation and enhancement of wealth can be a line of defence against attack, and may put the settlor in a much better position than if he or she had retained the assets.
Multi-jurisdictional experience, expertise and solutions
Many of our clients own businesses in more than one jurisdiction. Placing all of a client’s business assets into a coherent structure governed by a single legal system not only simplifies matters during that client’s lifetime but also avoids the complexities, time and expense of obtaining grant of probate in multiple jurisdictions upon that client’s demise. This type of structuring also allows the client to choose to prevent his business and other assets passing under the forced heirship legislation found in many civil law countries and those countries subject to Sharia law.
Thinking beyond tomorrow
There is no substitute for good and detailed advance planning to design the appropriate structure and to identify potential weaknesses or pinch points. Once the structure is established there needs to be excellent governance and appropriate levels of communication, which will minimise frustration and dispute and also see to it that the interests of settlor and beneficiaries are properly addressed both immediately and in the longer term.
In some cases a settlor will want to retain a high degree of control and reserve specific powers to him or herself. If so, these issues should be addressed at the start to make sure that the settlor turns his mind to the exercise of the specific power rather than simply retaining control generally, which could prevent the structure from being effective or at least give rise to significant tax problems. The position also needs to be considered for when the settlor is no longer around to offer guidance or to exercise reserved powers.
At Spindler & Partner LLP Succession Planning we are highly experienced in these areas and can work with settlors and their specialist advisers in creating, and then managing structures appropriate to meet their needs.