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12

|

aspects of land

| spring / summer 2017

SUCCESSION PLANNING

I

t is easy to equate succession planning with wills.

But a will should merely be the final formality in an

ongoing planning and management process – the

culmination of pre-agreed plans, with no nasty surprises,

no sources for dispute and no reason why the wealth

passed on should not continue to flourish.

Of course, life (or death) is not always so simple: all too

often, where there’s a will there’s a way to contest it and

a potential conflict ready to explode.This is particularly

true of rural estates, in which numerous family members

might have an interest.

However, it doesn’t have to be like that. If there is a

culture of communication and transparency, then a will is

merely expressing what has already been agreed.

It is a straightforward idea, but it requires forethought,

management and, above all, trust and openness.

“Families who think they are great at running a

business are often shocking at managing their own

relations,” says Clive Beer, head of Savills Rural

Professional Services. “Then when the time comes for the

family’s wealth to be passed on, the real legacy is one of

conflict, misunderstanding and resentment.”

Roy Williams and Vic Preisser, authors of the book

Preparing Heirs

, studied more than 3,250 families who

transferred wealth over 20 years.Their research showed

that 70 per cent of inter-generational wealth transfers

result in a loss of assets and family discord.

So why do they go so wrong? According to Williams

and Preisser, just 3 per cent of failed successions were

due to poor financial planning, tax and investments.

The vast majority, at 60 per cent were due to a lack of

communication and trust, while 25 per cent failed because

the heirs were not prepared for the responsibilities and

expectations that come with wealth.

Effective wealth succession therefore relies on good

family governance: establishing shared values, aims and

WHERE THERE’S A WILL

You could spend your life working hard to create a successful estate, but without putting

a similar effort into your succession planning, all that hard work could come to nothing

“EFFECTIVE

WEALTH

SUCCESSION

RELIES ON

GOOD FAMILY

GOVERNANCE:

ESTABLISHING

SHARED VALUES,

AIMS AND

PRIORITIES”