“We’ve seen more focus on some of the bigger family issues, particularly with first-generation wealth,” said James Penny, head of Barclays Plc’s U.K. International Private Bank. “Advice around the next generation and passing on wealth is something we’re going to focus on quite a lot more because of the unexpected events of this year.”
A handful of billionaire families aren’t letting the pandemic deter existing succession plans.
Wu Yajun, 56, one of China’s richest women, put her daughter in charge of their family office this year after transferring a stake in the property empire that made their fortune. Mexico’s Juan Francisco Beckmann, 80, recently handed over control of a New York City condominium to his daughter after giving her a stake last year in Becle SAB, the owner of Jose Cuervo tequila.
Beckmann’s son is Becle’s chief executive officer, but other wealthy clans may struggle to entice younger generations to lead the family business amid rapidly shifting attitudes toward such things as climate change and income inequality. Most potential successors to family businesses have ambitions of starting their own firms after finishing their studies, according to research by EY and Switzerland’s University of St. Gallen.
Younger Generations
“We’re now seeing families try to transfer businesses to a younger generation that is happier to own rather than operate, leaving them free to pursue different life goals,” said Ajay Wiltshire, a general counsel at accountancy and fiduciary firm Saffery Champness.
Philanthropy is often a major part of succession plans for the wealthy, as well. More than 200 members of the world’s rich have signed the Giving Pledge established by Bill Gates and Warren Buffett with promises to donate most of their money.
Caudwell, a pledge signatory, said he plans to give away about 70% of his fortune to charity, though that amount could increase. He said he doesn’t believe in bestowing huge windfalls to his offspring, but is relying on them to continue his charitable work after he’s gone.
“There’ll be a whole range of requirements in the way that they operate to make sure that money goes the furthest it possibly can,” he said. “That’s the way I operate, and that’s how I want them to operate.”
This article was provided by Bloomberg News.