Effective succession planning is now the single biggest issue
for high net worth individuals concerned about ensuring the
successful transition of wealth from one generation to the next.
They face a growing number of choices and challenges, not only in
relation to the ongoing management of the assets but also in
ensuring that their shared values and vision can be safeguarded and
that the agreed objectives of the family members can be met.
Private Trust Companies and Family Offices have developed to become
ideal platforms for preserving and enhancing the value of family
wealth. However such structures are only effective if there is
proper governance in place. Jersey is an ideal location for Wealth
Management for numerous reasons, not least because practitioners
have considerable expertise in these keys areas.
It is important to have a structure that allows family members
to participate in the ongoing management of the family's
wealth, within an environment that is wholly supportive and that
provides an educational framework for younger family members in
particular. Increasingly, family councils are being created. A
family council is an organised forum that allows family members to
interact directly with their professional advisers.
A family council can be responsible for:
Developing a Code of Practice establishing the mechanism for
the family and their advisers to interact together
Establishing family values and a vision for all members to
follow so as to ensure that the family identity is maintained
Providing a mechanism to assist in decision making on key
Providing a mechanism for agreeing the transition of assets
from one generation to the next
Providing a forum for the education of the family on the
responsibilities of wealth management
Encouraging a sense of responsibility amongst the family
It is the development of an effective working relationship
between family members and their advisers that makes this structure
really effective. by having a good governance structure, family
members are more likely to see themselves as custodians of the
family's wealth and work together to preserve and grow this for
the collective good of the family. The risk of not developing such
a structure is that important decisions could be made without due
and proper consideration which in turn can undermine the unity of
the family. A lack of governance leads not only to the family's
wealth not being optimised but, in many cases, being eroded and
When the family wishes to organise the management of assets for
future generations, but individuals within the family have
differing objectives and views, family governance becomes
particularly necessary. Governance is more than simply a structure
as it requires the establishment of a process for decision making
that helps to avoid any potential conflict.
Trusts are intended to enhance the lives of the family members
whether young or old. However, this can only be achieved when
combined effectively with sound governance policies and practices.
The likelihood of the successful transition of the family wealth to
the next generation is significantly increased with proper
governance in place.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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