The trillion dollar wealth transfer question

by 03 Dec 2014


The second problem may be alleviated by a family agreement which is a non-legal document whereby the owner, her spouse and family member stakeholders come up with a shared vision of a succession and estate plan. This plan is well rehearsed and everyone knows their role so that when the key owner or owners leave the stage at death, the new family owners are ready and willing to step up as stewards of the family enterprise thereby growing the business and improving not harming lifelong family relationships.

This harmony problem is often created by focussing too much on saving tax and protecting wealth from potentially greedy family stakeholders (don’t get me wrong, it is important to have an up to date will, a tax and estate plan and trusts to minimize tax and protect wealth) but not at the expense of creating toxic conflict rather than healthy disagreement. A more open focus on best practices taken from research of some of the most successful multi-generational family enterprises in the world can be helpful to prepare the family for ownership transition. The key strategy to improve harmony is to involve the family members in the process early enough to come up with a shared vision for a successful transition of wealth. In fact, many successful multi-generational families prepare their family first for processes and structures before they get the specialists to help implement the shared vision.

I think it was Einstein who said that if he had one hour to solve a problem he would take 55 minutes to think about what question to ask and then he would take only 5 minutes to solve it.


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