succession planning
W
hat do Jimi Hendrix, Stieg Larsson, Pablo
Picasso andAbraham Lincoln have in
common?The common factor is that they all
died intestate. Despite working hard to build
their careers, none had put in place measures
to protect their accumulated wealth and ensure it was passed on to
those they cared about.
Their stories highlight the often disastrous impact of not having a
carefully prepared will in place. Not only can it mean that accumulated
family wealth is dissipated, it can also cause irreparable family rifts and
mean that those who should have been beneficiaries end up missing out.
Picasso left a fortune in artwork, homes, gold, cash and bonds but
failed to do any planning and left no will.The battle over his estate
took six years to settle at a cost of $30 million.The fight over Jimi
Hendrix’s estate continued for more than 30 years after his death
and the fact that his music continued to earn royalties caused yet
further complications. Perhaps the most tragic case is that of Stieg
Larsson, author of
The Girl with the DragonTattoo
. He had lived with
his partner Eva Gabrielsson for 32 years. Failing to make arrangements
to provide for her during his lifetime, Swedish law dictated that his
estate should be divided between his father and brother. Similar rules
apply in the UK, with unmarried couples having no rights to inherit
should their partner die intestate.
A will alone may not be enough to protect assets for future
generations; detailed succession planning is also essential.That
includes planning how you want your assets to be used, determining
who you want to benefit from them – and putting in place structures
to protect your wealth and ensure these goals can be achieved.
Most of us would like the wealth we have created to benefit future
generations of the family, not just immediate children.The goal is
to create a legacy, perhaps by providing funds for education, a
deposit for a first home, income to support children in the early
years of their career or capital to establish a new business. No
matter how wealthy you are, these goals are not guaranteed without
careful planning.
‘The Chinese have an expression about wealth,’ saysAlexandra
Loydon, Head of Private Client Services for St. James’s PlaceWealth
Management.‘The first generation works hard to build family wealth.
credit to
the family
Dying without making the necessary arrangements for your finances
can lead to family rifts, lengthy legal battles and the dissipation of wealth;
instead leave a lasting legacy by starting to plan now
By Jill Insley
20
|
THE INVESTOR
in your interest
