Three tips for succession planning: How to start the conversation with your family

Wealth transfer

Learn how you can start a multigenerational dialogue on preparing for the unexpected while maintaining harmony with your loved ones.


Succession planning and family governance have always been essential to successful wealth planning and the COVID-19 pandemic has pushed the importance of preparing for the future to the forefront of many family discussions.

Why do I need a succession plan?

“If you leave everything untouched and unplanned for the next generation, they will have a very hard time settling the estate,” explains Vivian Kiang, managing director and head of Wealth Planning and Fiduciary Services at RBC Wealth Management in Asia. She says a non-existent or unfinished estate or succession plan could create conflict among family members as they go through the process of dividing up the assets.

Having a succession plan in place can encourage family harmony because there’s less chance that people will be surprised and react negatively. Kiang says that, at the very least, the risk of ambiguity among the family can be minimized with a structure in place.

Whether it is revisiting wealth plans to ensure they meet the current business and family realities across generations, or a family that is just starting to create a succession plan, here are some tips that may help kickstart the journey.

1. Think ahead and plan when to start the conversation

“There isn’t a perfect time for families to start a conversation,” says Octavia Liu, a wealth planner at RBC Wealth Management in Asia. “It depends on the family and its needs.”

It may also be situational, explains Liu. For instance, some families may have children living overseas and as tax considerations come into play, the topic of succession planning may need to be discussed as soon as possible in order to plan ahead.

Kiang also notes that families need to keep the age of their children in mind. She suggests including the next generation in the conversation when they are in their 30s and 40s “so they know what’s happening, understand the structure behind the plan and how it works.”

2. Understand the full picture of family wealth

Before discussing the actual structure of a succession plan and starting a conversation with family members, Kiang recommends coming up with a family inventory list. “They need to first have an idea of exactly how many assets they have,” she suggests. Take the time to write down all the assets and liabilities in order to gain a holistic view of the family’s wealth.

“The next step is to review the type of assets they hold. Is it through a family business, bank accounts or properties?” she says, adding that it’s also important to consider the location of these assets and how they are held. She explains that assets are subject to the tax and legal laws of the location they are based in. Additionally, the structure used to hold these assets will make a difference to how they are transferred.

Families who own a business need to consider the tax implications of selling or transferring it to the next generation, as well as any approvals from the board or other shareholders.

3. Be transparent during discussions around succession planning

“Be honest with your wealth planners so they can help provide viable solutions,” Liu says.

Families should share their plans with advisors when it comes to purchasing assets, such as a business or real estate. “Different jurisdictions have different ownership rules,” explains Liu. Providing this information early may help advisors give guidance on the appropriate structures that may be beneficial for their situation.

Ultimately, succession planning goes beyond just passing on wealth to the next generation. Keeping an ongoing and open dialogue can help communicate everyone’s needs and considerations, ensuring everyone is aware of the decisions being made and why. These discussions are grounded in a shared understanding that may go a long way in helping maintain family harmony.

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