Nowadays, it is increasingly common for those who lead family business groups to stop for a moment the intense daily work to reflect on the importance of designing and implementing an adequate succession planning that guarantees, on the one hand, the continuity of their business project, and on the other hand, the participation and work of the following generations to achieve that well-deserved continuity.
This planning involves a large number of elements that will be important to know, evaluate and intertwine properly for a successful succession. Some of these elements are: the involvement or not of family members in the management of the company, the personal and professional circumstances of each family member, the age, experience, schooling and professional development of each of them, the possibility of the family extending to relatives beyond direct lineal ascendants or descendants, the preparation of family or business assets for a more efficient distribution and management, the need for corporate governance that incorporates best practices with the participation of independent professionals, the periodic distribution of resources to beneficiaries that is consistent with the will of the founder or founders, formulas that promote and encourage the work and involvement of the following generations and avoid disinterest and conduct that could detract from the value of the company, criteria for prudent management of family businesses, as well as mechanisms and legal structures that ensure a better, quicker and more efficient distribution of assets and better management of the companies upon the death of the founders and the generations that succeed them.
With the support of other legal instruments such as wills, family agreements, shareholder agreements, mandates, powers of attorney, donations, etc., the ideal instrument to integrate each and every one of the above mentioned elements is the trust. The trust has the great advantage of being a flexible instrument that allows the incorporation of practically all the wishes of the founder or founders of a family business and facilitates the regulation in detail of each of the many peculiarities of the family business group. Each company and each family have their very particular characteristics that make them different from all the others; that is why they require a legal figure, such as the trust, that can accommodate those circumstances, adjust them as a “tailor-made suit”, and especially, give the founder or founders the peace of mind and security that their instructions will be executed by an independent third party to ensure that their wishes are fulfilled in the best possible way for the benefit of their successors and of the business group itself.
At Acedo Santamarina we have proven experience in succession planning trusts for family businesses. We also advise families in the planning, documentation and execution of structures that ensure the fulfillment of the wishes of their founders and the future of the companies, but above all, the protection of the family and the care of its future.
