Succession and Legacy
Succession plans are critical to the sustainability of a business. Even the most successful closely held business owners find succession planning more difficult than other critical business decisions. One of the biggest misconceptions is that estate planning and succession planning are one in the same.
Succession planning directly relates to the actual business itself. It is the strategy that will enable it to continue to operate smoothly and effectively as it is passed onto future generations, partners, or successor owners. Estate planning relates to all the assets in an individual’s estate including any ownership interests in closely held businesses.
Your estate includes all assets of any value that you own. This includes non-financial assets as well as financial assets, including real property, business interests, investments, insurance proceeds, retirement accounts and personal property.
Estate planning
Estate planning helps to organise your financial affairs to ensure your wealth is managed, distributed and transferred according to your wishes when you die. Your domicile and residency will determine the inheritance law(s) which will govern your estate.
This should also be taken into account when you consider changing your residency or establish a new domicile.
Inheritance Tax planning
Simply put, inheritance tax planning is the process of considering and putting in place arrangements to mitigate the inheritance tax due on your estate on your death. These arrangements are entered into during your lifetime, and can either take place then or upon death via your will.
Legacy
Legacy Planning is a more holistic approach to estate planning. It is the creation of a definitive plan for managing your total wealth while you’re alive, distributing your estate how you choose after your death, and a clear plan to pass on your legacy.
Your legacy also includes important decisions that ensure your family’s core values, responsible behaviours and community involvement, are passed on to future generations. Legacy planning prevents surprises by bringing the extended family into the planning process. And it lets patriarchs and matriarchs see their legacy begin to unfold while they are alive to appreciate it.
All affluent families are concerned with preserving and managing their wealth. They want to successfully navigate the risk that’s part of the modern world. But they’re more concerned about the things that can’t be quantified, such as bestowing wealth on children in a healthy way; expressing familial values through philanthropy, and ensuring that future generations understand the family’s values and the source of its wealth.
Traditional estate planning can preserve and apportion wealth but it does not help to ensure a stable legacy within a multi-generational family. It focuses on a transfer that occurs after a death, and it pertains to quantifiable financial assets. Little in conventional planning fosters long-term family harmony.
Your legacy is the impact you make on those who outlive you and the mark you leave on the world. It can include gifts or possessions, such as your business, money or property, but it’s more about your values and the family traditions you leave behind. Inheritance, on the other hand, is far more tangible and concerns the distribution of your wealth and the material possessions you pass on to your family or loved ones after your death. Both concepts are linked, as the values forming your legacy often play a role in your inheritance planning.
Freedom of testation
When you're thinking about moving to a new country, it's crucial to understand the intestacy rules that may affect your assets. Will you still have the freedom to distribute your assets as you wish, or will there be forced heirship rules in place? At Westmoore Private Clients, we can help you navigate these complexities and ensure your succession and legacy plans are in line with your wishes.