Protecting your legacy through estate planning

 A good estate plan starts with a clear understanding of the way your family business is currently structured. 

This directly affects how your estate planning should be organised and the types of documents you need in your estate plan. 

Before anything else, it’s essential to get a handle on your structures and how things are currently owned. Do you own your property or is it held in a trust? Are your shares in the company held personally, or through another entity? Do assets sit across multiple entities and, if so, who controls each one?

Your estate plan must cover these specifics, so decisions fall to the right people at the right time.

Remember, not everything is covered by a Will. For example, all of these key issues sit outside the scope of a standard Will:
- who takes control of the family business
- who takes over as trustee of the family trust
- who can act on your behalf if you lose capacity

  Effective business systems basically become the version
of yourself that you wish you could clone across the entire
business.  

When you select the right solutions and implement
them properly, they can automate tasks and create guardrails
that mirror your approach… even when you’re not there.

That’s why one of the best kept secrets of effective
succession is good systems. This hasn’t always meant
technology, but the growth of automation and machine learning has certainly changed the game in recent years.

If you don’t have the types of systems in place that can achieve this for you, consider working with a digital adviser who will:

• review your current setup
• provide feedback and recommendations
• help you evaluate fit-for-purpose solutions
• manage a successful implementation

The same applies to your financial systems. If you lack confidence in their strength and compliance after you’re gone, consider an outsourced CFO for on-demand or recurring support and an added layer of assurance.

  Life happens and plans change  
 

Maybe a child who was willing
to take over the family business is no longer able to, or a child
who once had no interest suddenly changes their mind. As
long as you remain flexible, this is where your “if not this, then
that” hypotheticals become very useful.

If plans are changing because of family conflict, don’t avoid or dismiss it. Engage in open conversations, let people share their views, and don’t try to resolve everything alone. Trusted advisers can play a key role in mediating and helping the family find a constructive way forward during disputes.

Where it suddenly becomes apparent that no one is willing to take over the family business, broaden your mind to the alternatives. For example, you could bring in a skilled and driven CEO. Maybe the family is still engaged in decision making, but relinquishes day-to-day management

There are many options, and it’s worth remembering that ownership and leadership don’t always need to be interchangeable.

  Of all the high-stress moments in your business journey, succession planning is one you really shouldn’t face alone.  
 

Ideally, you’ll already have a trusted adviser who has been
involved in the business for years. If not, that’s OK – but it’s
worth finding one as early as possible so you can tap into their
experience, insight, and neutrality.

A strong succession adviser will understand:

• tax implications
• business structures
• commercial considerations
• family business dynamics
• family dynamics

You’ll also need a capable lawyer who understands the direction of your succession plan and can prepare the appropriate legal documents to support it. 

RSM’s business advisers have worked closely with small family businesses through to high-net-wealth family offices throughout their succession journeys. 

They count on us to help set a clear path, solve problems, and bring perspective from years of working with businesses like theirs. The relationship offers an impartial and insightful perspective that they simply wouldn’t have if they were trying to work through it alone

  Don’t leave succession planning to the back of a napkin, or as some casual conversations over dinner  
 

Succession planning is serious business and deserves to be treated that way.

This means documenting all of your intentions and updating them as plans evolve.
A well-documented succession plan should have elements such as:

• clear timelines and milestones
• roles and responsibilities
• any changes to reporting lines or structure
• shareholding arrangements
• tax planning
• contingency planning

It may also include estate planning documents, which we cover in Part 5.

Once drafted, you might choose to share the succession plan with everyone it affects so they know where they stand and always have a clear roadmap to return to.

Some families prefer a clean break where the founder steps
away completely. Others take a phased approach, where the
founder stays on in some form of executive or non-executive
capacity for a while.

Typically, it’s a gradual process of easing back while supporting others to step up. At some point though, the founder does need to let go. Hopefully, to enjoy their golden years and next adventure!

Hanging on too tight, constantly pushing back against your successor’s plans or ideas, and getting caught up on how things should be done probably won’t end well. Your successor will simply start to pull away, and it could jeopardise everything you’ve done to prepare until now.

Once you do let go, you’ll find it was never about losing control.
It was about creating space for and building confidence in the next generation to lead in their own right.

This final act of trust can be the turning point in succession, and the moment when a family business truly turns into a lasting legacy.