Succession planning relies on clear communication between family members. The inheritance conversation might start with a matriarch or patriarch, but when the heirs’ needs aren’t considered or acknowledged, it can lead to problems down the road and even destroy a family.
Ivan Hernandez, the co-owner of Omnia Family Wealth, says “Wealth transference can be a complicated matter to explain to heirs. Givers have all the control and there will be ramifications if not explained in detail.”
Wealth management advisors understand that each family member makes contributions to the overall health of the family. But not all members take on the same roles. Some may feel they are defined by their contributions to the family while others just want validation.
When ownership of a family business is at the center of the succession planning, one member may have passion for the family business while the others have no interest. The heir who is passionate about the business is likely positioned to gain a greater portion of the inheritance.
Hernandez suggests creating options that recognize each individual recipient’s contribution. He adds that succession planning needs to focus on the journey, not the destination, for families who want to respect one another and value the family dynamic.