Except necessary measures are taken and adhered strictly to, generational wealth transfer may be big challenge for most businesses and family enterprises, expert, Henry Hollingdrake has said.
Hollingdrake at a roundtable discussion with ARM Trustees Limited team stated that the chances of wealth being efficiently transferred successfully to the next generation without incurring liabilities and unnecessary risk combined with the ability to further invest free from any restraints and excessive taxation are more complicated now than ever before.
He buttressed that this is ironic given that today’s world offers many accessible tools and estate planning vehicles such as Wills, Trusts and Foundations.
In breaking down this claim, he further explained that in today’s world, owning valuable assets does not guarantee the value of the assets will be preserved when transferred to the next generation. In worse cases where there is intestate succession, i.e. no Will or mechanism in place to pass on wealth, this function is left to the state to decide.
“Even if an estate plan is in place, it would also need to provide adequate asset protection and future growth. One also needs to guard against excessive professional fees charged against an Estate that is fraught with complications on death, Hollingdrake said.
Engaging him further, we asked, if your claims are indeed valid, how does one ensure that wealth is transferred and enjoyed by one’s next generation?
In his response, he stated that first, we must be willing to leverage estate planning tools like Wills, Guardianship documentation, Trusts and Foundations, and the utilisation of relevant co-ordinated structure for larger and more complex estates.
He explained that an Estate Plan be it local or international, includes having strategies in place to manage: the effect of inheritance tax, ease of wealth transfer and business succession relating to investments, real-estate, your pension fund, and other assets, which could form a significant portion of your wealth.
An estate plan will he noted will help individual and families with both local and international assets, investments, and business operations give careful consideration and properly document their holdings to ensure the assets are protected and passed on to future generations.
“This is effective, legally robust, practical and efficient. Estate planning offers you protection without borders, especially considering potential shifts in Residency and Citizenship, which may impact one’s wealth. Effective management and ownership of a business operation can also be safeguarded by setting up a Succession plan.”
Hollingdrake concluded the round table discussion by stating that families who seek to get started on understanding what is required for an estate plan or indeed would like to set one up, can reach out to ARM Trustees Limited, an award-winning independent firm with over 20 years’ experience in this field and now also offering international solutions.’
