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Succession Planning in Financial Planning

5 January 2021

Have you ever thought to yourself, “What happens when I can no longer contribute to my family in the way that I currently do?” Although it may seem difficult or overwhelming to consider succession planning, it’s never too early to do so.

A poorly managed transition can trigger any number of issues, from family tensions to financial losses.

Families with more robust governance structures are better equipped to tackle unexpected changes and manage difficult decisions – ultimately protecting their assets. As with any governing body, there needs to be plans and protocols in place to preserve the continuance of the administration. To plan for succession, you need a clear vision of what you would like to achieve, and knowledge of the means to best bring your vision to fruition.

With the right structures in place, you can make important decisions on the destination of your family’s wealth and establish the optimal vehicles to achieve your objectives – whether you plan to pass capital on to future generations or are contemplating a philanthropic benefaction. Aside from structuring, we must ensure that the forthcoming generations have their expectations managed and are aware of, and understand, their roles and responsibilities.

One of the most common problems is people not giving succession planning the time it deserves early enough. Your succession plan doesn’t have to be carved in stone; it is an evolving conversation.

Thorough planning helps to avoid potential family disputes when succession becomes a consideration. At SFP, we provide support in planning for all eventualities: defining who you would like to benefit from your estate, when, how and in what proportions, the contingency of a family member becoming incapacitated, the future of the family business, etc.

A succession plan is not an event that takes place. It is a lengthy process that requires getting the family values aligned, creating the right structures and reassessing them as times change, having difficult conversations and employing intergenerational teamwork.

Having a focus on succession planning within your financial journey empowers you to be aware of your own integrity, to respect the people in your life and to lead courageously. If you want to have a conversation about succession planning – let’s have a chat.

Sanlam Life Insurance is a licensed financial service provider.
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