Family office approach
Family office approach
Podcast
3.12.2024
A successful succession strategies enables what has been created in life to be preserved in the long term. The aim is to pass on private assets and companies to the next generation in an orderly manner while protecting one's own interests. This can be done in various ways and requires intensive and early planning. Without careful succession strategies planning, not only can the wealth and company values be jeopardized, but family conflicts can also arise that make the handover more difficult. As a successful succession strategies not only includes consideration of family and financial aspects, but also legal and corporate strategy issues, it is advisable to seek advice from experts.
Private wealth succession and business succession pursue different goals. The focus of private wealth succession lies in the transfer of personal assets such as real estate, securities or other investments to the next generation or to selected third parties. Private wealth succession is often regulated by wills, gifts or the establishment of foundations.
Company succession, on the other hand, is about handing over a company successfully and sustainably to a suitable successor or to the next generation. It is advisable to draw up a succession plan at an early stage, covering all relevant factors such as the selection of a successor, the handover of management, the integration of external managers if necessary and the financing of the succession. The process requires extensive advice in order to overcome tax, legal and operational challenges and ensure a smooth transition.
Asset succession planning often presents private individuals with a number of challenges. One important aspect of wealth succession is preserving family peace. Asset distribution and succession can lead to tensions between heirs, especially if there are different ideas about entitlement or the use of assets. A transparent and well thought-out succession strategies helps to avoid conflicts and ensures that the expectations of all parties involved are clarified.
Another key issue is the family's financial security, which should ideally be arranged early on during the asset owner's lifetime. Strategic asset structuring is particularly important to ensure that the family does not find itself in a difficult financial situation in the event of death or that measures have to be taken that result in financial disadvantages. This can happen, for example, if the wealth consists mainly of real estate, company shares or increasingly of investments that are difficult to liquidate and, in addition, the surviving dependants may not have sufficient liquid assets available. In such cases, it may be necessary to sell real estate quickly in an unfavorable market phase or to take out loans in order to pay inheritance tax, for example. Careful planning ensures that such situations can be avoided.
Protecting the testator during his or her lifetime also plays an important role. A first step can be to grant a bank power of attorney. It is a comparatively simple way of granting a trusted person access to bank accounts in order to manage banking transactions in the event of absence or illness, for example
If the testator is no longer able to manage their own affairs in the long term due to illness or an accident, the power of attorney offers selected person(s) the opportunity to make legal, financial and personal decisions on their behalf that go far beyond pure banking transactions, such as managing real estate, representing them in dealings with authorities or organizing their own care. In addition, a living will ensures that medical treatment is in line with the wishes of the person concerned.
In addition to the family and personal aspects, legal and tax aspects play a major role in the transfer of assets. Anyone wishing to pass on their wealth must deal with the effects of inheritance tax/gift tax. In order to minimize tax burdens, gifts during one's lifetime - also known as anticipated succession - can be used to transfer assets early and in a tax-efficient manner. Drawing up a will or contract of inheritance is important in order to clearly define your own wishes and avoid legal and family disagreements later on.
Strategies for implementing succession strategies can include drawing up a will in favour of certain people or organizations as well as setting up a foundation. This can serve family or charitable purposes and is established either during your lifetime or in the event of your death.
External advice from specialists such as tax advisors or lawyers is often essential to ensure that the succession strategies is legally and fiscally optimized and that the wishes of the testator are taken into account in all respects.
A decisive factor in overcoming these challenges is a careful analysis and design of the structures at wealth and family level and communication with the family. Open discussions with the heirs and other parties involved help to avoid misunderstandings and conflicts.
succession strategies poses numerous, complex challenges for entrepreneurs. In principle, the same aspects of wealth succession planning that are important for private individuals also apply to entrepreneurs, in addition to other points.
Entrepreneurs are often faced with the decision of whether to hand over the company to their own children, external successors or a buyer. It may be that there are no suitable heirs in the family or that the successor generation has different ideas regarding the direction and (continued) management of the company.
In such cases, succession solutions via a management buy-out (MBO) or management buy-in (MBI) offer an alternative.
The complex wealth and family structure of many entrepreneurs also requires special attention. Various company shareholdings, assets and different interests of family members make structured and transparent planning necessary.
Financial and tax issues are also an important part of succession strategies . Characteristics such as company valuation, company and shareholder structure, balance sheet structure, play a major role in considering the tax burden and opportunities for tax optimization. Early strategic advice is of great importance in order to ensure both the continued existence of the company and the financial security of the entrepreneur and the family.
There are also corporate strategy challenges that affect the long-term future and stability of the company . A clear corporate strategy that is aligned with the succession and the preparation of the operational business for new management are essential to ensure the continuation and success of the company.
In addition, the entrepreneurial succession strategies should be interlinked and coordinated with the personal succession strategies . A purely isolated approach can have significantly detrimental consequences.
These diverse aspects show how challenging succession strategies is for entrepreneurs and why comprehensive advice is essential.
In order to successfully overcome the challenges of succession strategies , it is crucial to develop a structured succession plan that covers both company and private asset succession. This begins with careful preparation of the company succession, taking into account both personnel and financial aspects. Suitable successors, whether from within the family, the company itself or externally, should be selected at an early stage to ensure a smooth transition. It is also important to position the company financially in such a way that it remains stable in the coming years.
In some cases, setting up foundations can also be a sensible strategy to secure wealth in the long term and/or transfer it in a tax-efficient manner. Different approaches can be pursued (also in combination): A foundation can serve charitable purposes, provide security for the family or ensure the continued existence of a company.
In any case, it makes sense to consult external specialists such as tax advisors, lawyers or management consultants in order to avoid tax and legal pitfalls and to structure the succession in the best possible way. A family office can provide particularly valuable support here.
A family office offers a number of advantages at succession strategies. It assists in the development of bespoke solutions tailored to the individual life situation and goals of the asset owner. In addition, a family office provides access to an extensive network of experts, such as lawyers or tax advisors, who provide support in various areas of succession strategies .
An existing network of trusted partners will of course be involved in strategic planning and collaboration at the request of the asset owner. In these cases, the family office is often entrusted with objectively assessing the situation, contributing new perspectives based on their experience and acting as a sparring partner for the entrepreneur, which can also confirm the path already taken. A family office also ensures that all assets and their structure are made transparent and comprehensible. To this end, a detailed statement of total assets is first drawn up for the asset holder, which provides basic asset transparency for succession strategies . Asset reporting and controlling helps the entrepreneur to manage their wealth during their lifetime. In addition, a family office provides support through strategic asset structuring and facilitates access to investment solutions. In the process, a wealth- and, if applicable, an ownership structure is created that both meets the family's current needs and objectives and also satisfies future requirements for the wealth . The family office ensures cross-generational support and develops customized strategies to preserve the wealth and implement the family's requirements.
FINVIA acts as a strategic trailblazer and sparring partner and coordinates all the important steps in planning and structuring an orderly succession of assets.
FINVIA offers asset owners comprehensive advice on how best to allocate their assets and secure their life planning. Dispositions that have already been made, such as wills, inheritance contracts, marriage contracts, gifts or the establishment of foundations, are taken into account and inheritance tax projections and liquidity planning are integrated into succession strategies . This ensures that the transfer of assets is optimally structured and that personal goals and wishes for the future are taken into account. The tax and legal implementation is carried out by the exclusive network of specialized consultants.
FINVIA also offers entrepreneurs comprehensive support through the involvement of a network specializing in company-related aspects. Topics that may arise in this context include the optimization of the company and balance sheet structure, the exemption of business assets, company development and various solutions for company succession. Important documents and regulations, such as family and corporate governance guidelines and articles of association, are carefully reviewed and aligned with the objectives. FINVIA's top priority is to ensure the sustainable and cross-generational succession of companies and assets. Our aim is to preserve your values, which are important for future generations. Contact us to discuss your personal concerns and work out the best strategy for your succession strategies .
Overall, it can be said that an early and well-thought-out succession strategies is essential for the successful transfer of private assets and companies. Both private individuals and entrepreneurs are faced with complex challenges. These include legal and tax aspects, but also family, company-related and financial factors.
To avoid common mistakes, it makes sense to seek the help of competent advisors and experts. A family office can be the right point of contact here. Family offices such as FINVIA ensure that wealth is secured for the long term and optimally structured. They also offer access to an exclusive network of experts.
Family office approach
3.12.2024
Tanja Edenhofer
succession strategies presents both private individuals and entrepreneurs with complex challenges, as financial, legal, tax and private aspects need to be taken into account. FINVIA supports you in all steps of asset succession.
A successful succession strategies enables what has been created in life to be preserved in the long term. The aim is to pass on private assets and companies to the next generation in an orderly manner while protecting one's own interests. This can be done in various ways and requires intensive and early planning. Without careful succession strategies planning, not only can the wealth and company values be jeopardized, but family conflicts can also arise that make the handover more difficult. As a successful succession strategies not only includes consideration of family and financial aspects, but also legal and corporate strategy issues, it is advisable to seek advice from experts.
Private wealth succession and business succession pursue different goals. The focus of private wealth succession lies in the transfer of personal assets such as real estate, securities or other investments to the next generation or to selected third parties. Private wealth succession is often regulated by wills, gifts or the establishment of foundations.
Company succession, on the other hand, is about handing over a company successfully and sustainably to a suitable successor or to the next generation. It is advisable to draw up a succession plan at an early stage, covering all relevant factors such as the selection of a successor, the handover of management, the integration of external managers if necessary and the financing of the succession. The process requires extensive advice in order to overcome tax, legal and operational challenges and ensure a smooth transition.
Asset succession planning often presents private individuals with a number of challenges. One important aspect of wealth succession is preserving family peace. Asset distribution and succession can lead to tensions between heirs, especially if there are different ideas about entitlement or the use of assets. A transparent and well thought-out succession strategies helps to avoid conflicts and ensures that the expectations of all parties involved are clarified.
Another key issue is the family's financial security, which should ideally be arranged early on during the asset owner's lifetime. Strategic asset structuring is particularly important to ensure that the family does not find itself in a difficult financial situation in the event of death or that measures have to be taken that result in financial disadvantages. This can happen, for example, if the wealth consists mainly of real estate, company shares or increasingly of investments that are difficult to liquidate and, in addition, the surviving dependants may not have sufficient liquid assets available. In such cases, it may be necessary to sell real estate quickly in an unfavorable market phase or to take out loans in order to pay inheritance tax, for example. Careful planning ensures that such situations can be avoided.
Protecting the testator during his or her lifetime also plays an important role. A first step can be to grant a bank power of attorney. It is a comparatively simple way of granting a trusted person access to bank accounts in order to manage banking transactions in the event of absence or illness, for example
If the testator is no longer able to manage their own affairs in the long term due to illness or an accident, the power of attorney offers selected person(s) the opportunity to make legal, financial and personal decisions on their behalf that go far beyond pure banking transactions, such as managing real estate, representing them in dealings with authorities or organizing their own care. In addition, a living will ensures that medical treatment is in line with the wishes of the person concerned.
In addition to the family and personal aspects, legal and tax aspects play a major role in the transfer of assets. Anyone wishing to pass on their wealth must deal with the effects of inheritance tax/gift tax. In order to minimize tax burdens, gifts during one's lifetime - also known as anticipated succession - can be used to transfer assets early and in a tax-efficient manner. Drawing up a will or contract of inheritance is important in order to clearly define your own wishes and avoid legal and family disagreements later on.
Strategies for implementing succession strategies can include drawing up a will in favour of certain people or organizations as well as setting up a foundation. This can serve family or charitable purposes and is established either during your lifetime or in the event of your death.
External advice from specialists such as tax advisors or lawyers is often essential to ensure that the succession strategies is legally and fiscally optimized and that the wishes of the testator are taken into account in all respects.
A decisive factor in overcoming these challenges is a careful analysis and design of the structures at wealth and family level and communication with the family. Open discussions with the heirs and other parties involved help to avoid misunderstandings and conflicts.
succession strategies poses numerous, complex challenges for entrepreneurs. In principle, the same aspects of wealth succession planning that are important for private individuals also apply to entrepreneurs, in addition to other points.
Entrepreneurs are often faced with the decision of whether to hand over the company to their own children, external successors or a buyer. It may be that there are no suitable heirs in the family or that the successor generation has different ideas regarding the direction and (continued) management of the company.
In such cases, succession solutions via a management buy-out (MBO) or management buy-in (MBI) offer an alternative.
The complex wealth and family structure of many entrepreneurs also requires special attention. Various company shareholdings, assets and different interests of family members make structured and transparent planning necessary.
Financial and tax issues are also an important part of succession strategies . Characteristics such as company valuation, company and shareholder structure, balance sheet structure, play a major role in considering the tax burden and opportunities for tax optimization. Early strategic advice is of great importance in order to ensure both the continued existence of the company and the financial security of the entrepreneur and the family.
There are also corporate strategy challenges that affect the long-term future and stability of the company . A clear corporate strategy that is aligned with the succession and the preparation of the operational business for new management are essential to ensure the continuation and success of the company.
In addition, the entrepreneurial succession strategies should be interlinked and coordinated with the personal succession strategies . A purely isolated approach can have significantly detrimental consequences.
These diverse aspects show how challenging succession strategies is for entrepreneurs and why comprehensive advice is essential.
In order to successfully overcome the challenges of succession strategies , it is crucial to develop a structured succession plan that covers both company and private asset succession. This begins with careful preparation of the company succession, taking into account both personnel and financial aspects. Suitable successors, whether from within the family, the company itself or externally, should be selected at an early stage to ensure a smooth transition. It is also important to position the company financially in such a way that it remains stable in the coming years.
In some cases, setting up foundations can also be a sensible strategy to secure wealth in the long term and/or transfer it in a tax-efficient manner. Different approaches can be pursued (also in combination): A foundation can serve charitable purposes, provide security for the family or ensure the continued existence of a company.
In any case, it makes sense to consult external specialists such as tax advisors, lawyers or management consultants in order to avoid tax and legal pitfalls and to structure the succession in the best possible way. A family office can provide particularly valuable support here.
A family office offers a number of advantages at succession strategies. It assists in the development of bespoke solutions tailored to the individual life situation and goals of the asset owner. In addition, a family office provides access to an extensive network of experts, such as lawyers or tax advisors, who provide support in various areas of succession strategies .
An existing network of trusted partners will of course be involved in strategic planning and collaboration at the request of the asset owner. In these cases, the family office is often entrusted with objectively assessing the situation, contributing new perspectives based on their experience and acting as a sparring partner for the entrepreneur, which can also confirm the path already taken. A family office also ensures that all assets and their structure are made transparent and comprehensible. To this end, a detailed statement of total assets is first drawn up for the asset holder, which provides basic asset transparency for succession strategies . Asset reporting and controlling helps the entrepreneur to manage their wealth during their lifetime. In addition, a family office provides support through strategic asset structuring and facilitates access to investment solutions. In the process, a wealth- and, if applicable, an ownership structure is created that both meets the family's current needs and objectives and also satisfies future requirements for the wealth . The family office ensures cross-generational support and develops customized strategies to preserve the wealth and implement the family's requirements.
FINVIA acts as a strategic trailblazer and sparring partner and coordinates all the important steps in planning and structuring an orderly succession of assets.
FINVIA offers asset owners comprehensive advice on how best to allocate their assets and secure their life planning. Dispositions that have already been made, such as wills, inheritance contracts, marriage contracts, gifts or the establishment of foundations, are taken into account and inheritance tax projections and liquidity planning are integrated into succession strategies . This ensures that the transfer of assets is optimally structured and that personal goals and wishes for the future are taken into account. The tax and legal implementation is carried out by the exclusive network of specialized consultants.
FINVIA also offers entrepreneurs comprehensive support through the involvement of a network specializing in company-related aspects. Topics that may arise in this context include the optimization of the company and balance sheet structure, the exemption of business assets, company development and various solutions for company succession. Important documents and regulations, such as family and corporate governance guidelines and articles of association, are carefully reviewed and aligned with the objectives. FINVIA's top priority is to ensure the sustainable and cross-generational succession of companies and assets. Our aim is to preserve your values, which are important for future generations. Contact us to discuss your personal concerns and work out the best strategy for your succession strategies .
Overall, it can be said that an early and well-thought-out succession strategies is essential for the successful transfer of private assets and companies. Both private individuals and entrepreneurs are faced with complex challenges. These include legal and tax aspects, but also family, company-related and financial factors.
To avoid common mistakes, it makes sense to seek the help of competent advisors and experts. A family office can be the right point of contact here. Family offices such as FINVIA ensure that wealth is secured for the long term and optimally structured. They also offer access to an exclusive network of experts.
About the author
Tanja Edenhofer
Tanja Edenhofer is a Senior Family Officer at FINVIA. She has more than two decades of professional experience in the field of holistic asset structuring of complex wealth as well as asset investment and succession planning. Before joining FINVIA, Ms. Edenhofer advised wealthy private clients, medium-sized family entrepreneurs and foundations in the private banking sector such as Bankhaus Lampe, Berenberg Bank and in Wealth Management at Dresdner Bank. She is certified in the field of securities consulting and foundation management from her part-time studies at the LMU, Munich and the EBS, Oestrich-Winkel.
Tanja Edenhofer supports charitable foundations based in Rhineland-Palatinate and Hesse on a voluntary basis as a board member.
