In a world of increased transparency it is important that flexibility plays a key role in succession planing, writes Dominic Condé-Cole
People may remember where they were when the Chilean miners were rescued, or watching Kate and William get married, or they may instead remember the Spice Girls or the beginning of the recession(s).
Lots of key moments in history that stick in my mind are unplanned events and yet many people work hard to try and make an impact that will be remembered for generations.
This may be in a very vocal and widely publicised manner, such as with Greta Thunberg and the Extinction Rebellion protests. Alternatively, as with a number of clients I have spoken to recently, a quiet concern that the successful business and wealth generated during their lifetime will not thrive after they are no longer there to manage it.
We have seen how quickly high-street name companies can fail. How best to ensure a successful business renowned for its values continues through generations, rather than declining, is a key concern for many entrepreneurs.
As a private wealth lawyer I have seen the focus shift slightly over the last few years. Each time the UK has introduced more stringent tax rules on succession there has been the temptation for individuals to focus primarily on tax efficiency for their succession plan.
However, increasingly the principal conversations surround correct governance, philanthropic ventures and business continuity so that the reputation so carefully curated during someone’s lifetime lives on after their death.
Tax plays a key role, but is second fiddle to the wider conversations around what the legacy will be. This may be, in part, due to the increasing transparency applied to business and assets such that more people are in the public eye than ever before.
Of course the best laid plans of mice and men often go awry. Whilst I have not counselled any mice, plenty of the men and women I have advised have been concerned that unexpected situations will upset their plans.
Flexibility in a succession plan is therefore always key. The next generation set to take over the business may, when having been introduced to the business at an appropriate age, decide that the burden of the family legacy is not for them. Indeed they could (and would rather) build upon the legacy in a different manner.
Perhaps the legacy will be the next generation adding to and curating the collection of art, wine or cars. Would they prosper managing a family charitable foundation whilst the business continues under management by a third party?
Alternatively it may become clear that despite the next generations’ wishes, the business and assets will thrive better without them. This can be impossible to determine when a succession plan is rigid and does not afford everybody time to ‘try out’ their potential new roles and responsibilities.
It is not conceivable to determine exactly how we will be remembered, but allotting sufficient time during your lifetime to lay the foundations for leaving a legacy is imperative.
Whilst we lawyers are often seen as the ‘no’ people, there are a multitude of options available to assist with whatever your wishes may be, and of course this can always change over time. Leaving a legacy to transcend (at least for your nearest and dearest) the next Spice Girls or the Star Wars franchise may just be possible with good planning and advice.
Dominic Condé-Cole is an associate at Maurice Turnor Gardner