Legacy planning is a sensitive topic for anyone, and the world’s affluent aren’t an exception. However, with the global reign of the COVID-19, the question of effectively thinking ahead has become noticeably more urgent. Here we’ve gathered five key succession planning tactics observed from the UHNWI worldwide.
Comprehending The Significance
The very first step to succession planning is clearly picturing its purpose. This comes with an uneasy acceptance of the fact that nobody can live forever. And since nothing can be done about death, the best thing to do is take care of what will come after.
Planning your legacy usually consists of several fundamental components. Some of them, such as writing a will, take effect after the passing, while others can produce visible results all throughout the lifetime. Considering both stages is essential to building a broad composition and making sure every opportunity is seized.
Setting Up A Family Office
Family offices can be vital to prosperous wealth management. Every well-established office will consist of experts from the fields like investment, philanthropy, tax-related strategizing, estate management and legacy planning. A great amount of influential families worldwide have already shifted to utilizing a family office, rather than managing an army of independent experts.
On top of the general effectiveness, family offices come in especially handy during crises, both internal and external. When the family is experiencing a transition, whether it is purely corporate or personal, such as death, or when the world is going through a series of dramatic events, it can be mighty convenient to let the office handle critical decision-making.
Although it might appear slightly counterintuitive, succession planning is an ongoing process. The main reason for this is the fact that the situation in the world is constantly changing, which calls for timely adjustments.
The Coronavirus pandemic is a great example: just one year ago nobody would’ve imagined how much the planet would need to adapt to the new way of living. This adaptation included major shifts in focus, especially when it came to asset allocation and investments. With digital media and healthcare sectors skyrocketing beyond any predicted limit, those who were bidding on hospitality and real estate had to make some grand re-arrangements.
Guiding The Next Generation
Generational transition doesn’t have to be challenging, if it’s done right. Preparing the successors for what comes next is a process that has to start early. Affluent families are caring the great power to impact the world, and every family’s vision plays a huge role in what this impact will be.
The good news is that in many cases the heirs will have an idea of what they might bring to the scene in the future. This means that listening and accepting are both pivotal to healthy transitioning. Younger generations have already started showing the examples of thought-through, impactful behavior when it comes to investments and humanitarian causes. Which makes the job of family heads a lot easier.
Last but not least, philanthropic activities contribute a great deal into functional succession planning. Exhibiting social involvement and empathy works on several levels: from actual help to the groups, individuals and institutions in need to building an affable legacy. As already mentioned, UHNW families are in possession of great power, and it makes perfect sense to apply it in the wisest and most accommodating way possible.