Safeguarding a family inheritance: communication is key
Farms and rural estates can be successfully passed down from generation to generation, but only if families get their succession planning right.
And the greatest threat to future prosperity? It could well be the family itself. A failure of leadership, to communicate openly, to discuss sensitive issues about wealth and inheritance, to identify and respect individual skills, and to agree a common purpose can all spell disaster.
That’s where third party professional help is invaluable. Those of us who work in this field can have discussions with family members they might feel uncomfortable having with each other. Parents, for example, might find it impossible to tell a child they don’t want to include their spouse in a business plan, but I wouldn’t.
We can ask the questions no one else will and that can lead to greater understanding. Third party help can be useful even if there’s no conflict – the most loving of families do not always communicate well. We're transitory; family ties are there forever.
It pays to pave the way when children are young – not by involving them in business matters but by encouraging them to work out family decisions with their siblings so they are prepared for the bigger choices they might one day have to face together.
It’s also important for children to grow up with a long-term understanding of what wealth means and the responsibilities it entails. If someone is spoilt and entitled when they’re 10, that won’t change.
Family discussions are particularly important where the asset is land or a country estate that will be inherited by the oldest child. If everyone agrees the purpose is to conserve heritage and legacy, then younger brothers and sisters can accept that dividing it up into equal shares isn’t an option.
Having said that, though they might inherit a title, the oldest child may not have the right skills to protect and build the family assets. Being a younger child doesn’t necessarily rule him or her out.
Drawing up a written family constitution will help avoid misunderstandings and maintain focus. But above all, communication – sitting down to talk – is the best way to plan for the future.
- This blog is based on succession planning, a discussion featuring Clive Beer and Matthew Fleming of family office Stonehage Fleming, in the spring/summer edition of Savills Aspects of Land