Family wealth across the generations: the importance of planning and transparency
No one wants happy and harmonious family occasions to turn into arguments about money or the policy of the family-owned business. A lack of clear agreements and asset planning can lead to precisely such tensions, though. This means that a family charter and asset planning are no luxury: they are a necessity.
This article was originally published on the De Tijd website as part of a sponsored collaboration. You can find the original article at tijd.be.
Spending a lifetime building up a business and a fortune, only to then partially let go of it is a complex challenge. It’s not just a matter of money: it’s also about the pride and ideals associated with that wealth. Despite this, many entrepreneurs put off this planning process, often leaving it too long. ‘This is one of the biggest pitfalls,’ says Dieter Verbeek, executive director of wealth management Flanders at ABN AMRO. ‘A well-timed approach prevents unpleasant surprises and family disputes.’
Asset planning is an ongoing process rather than a one-off exercise. ‘It evolves along with the business, the family, the assets and the law. A structure that’s perfect today may be out of date in three years’ time,’ stresses Verbeek. ‘Many entrepreneurs try to manage their asset planning and the transfer of their business themselves, but that’s not always the best approach. Entrepreneurs bring in experts in connection with their business. Asset planning deserves this specialised too.’
A clear overview
The first step is to identify all relevant factors: the assets, any written agreements, the family structure, objectives and potential risks. ‘Sometimes parents are concerned about how motivated their children will be to work hard once they know how much wealth there is. Preserving the family wealth and the continuity of the business are often key considerations too. What if a child divorces? What if none of the children wants to enter the family business, or what if they all aspire to the same role?’ adds Marleen Celen, director of private wealth management at ABN AMRO. ‘These challenges require time and a tailored approach. Legal structures can help maintain control, while transparent communication, for example through a family charter, provides clarity.'
Involve the next generation at an early stage
Getting the next generation involved early on prevents surprises. ‘Families value financial independence, but also the preservation of the assets and the family business for future generations,’ says Celen. ‘That’s why ABN AMRO established an academy along with Solvay Business School. This allows us to support children in their role with regard to the family assets.’
‘Our own role has also shifted from being purely financial to offering strategic and family advice,’ concludes Verbeek. ‘We help entrepreneurs and families see the bigger picture and surround them with experts to shape their vision for the future carefully, both personally and for the business.’
Family ties and business partnership: the story of Zuidnatie
Successfully transferring a family business is more than a financial transaction: it requires vision and dialogue. Stéphanie Feys, managing director at Zuidnatie, shares in Tomorrow Talks how she and her father together form a strong team, guided by clear agreements and a family charter. This has kept both the business and the family ties healthy.