Why is succession planning important?

Date 13/06/2019
2 minutes to read
Olly Norman

Olly Norman, Director – Client Services, Equiom Guernsey  

It is important for a variety of reasons but the main point of succession planning is to ensure that your hard-earned wealth gets passed on according to your wishes. At Equiom, we have seen an increased level of enquiries from people located in jurisdictions which have forced heirship regimes, whereby an individual is prohibited from disinheriting certain next of kin or applying inheritance outside pre-ordained proportions. They wish to explore the possibility of utilising a discretionary trust arrangement in order to ensure that their estate is distributed according to their wishes. 

In most forced heirship jurisdictions if a minor was the beneficiary of an estate they would normally receive their full entitlement when they turn 18 years of age. Up until that point, their appointed guardian would be responsible for the assets left to them. The potential client may have concerns over the suitability or the intentions of the guardian and may feel that an independent third party may offer them more peace of mind. They may also have reservations about bequeathing large sums upon someone so young. Using a discretionary trust is one way of protecting against this. Should the estate be settled into trust then the settlor can have a greater influence as to when his intended heirs receive their funds. They may wish to ensure that certain criteria are satisfied before large capital sums are distributed, for instance, reaching a certain age, getting married, or completing qualifications. They may wish to benefit future generations and not just their immediate family, or even support charitable causes or a far wider class of beneficiaries.

Guernsey trustees are well placed to provide these solutions having sophisticated and robust trust legislation and jurisprudence in place and settlors have the reassurance that professional trustees are well regulated by the Guernsey Financial Services Commission. At Equiom we provide solutions for a variety of succession planning needs to help ensure that individuals do not leave this important aspect of their financial affairs to chance.

For more information on this topic please contact Olly Norman.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.
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