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It’s a Family Affair

Monday, February 1st, 2016

Wealth Planning: A Family Affair
Arbuthnot Latham Spring Journal

Strong businesses are constantly looking ahead, trying to forecast future commercial risks and opportunities, with varying degrees of success. Family companies need to do this too, but they are exposed to an additional risk – family risk – which can undermine an unprepared business in the same way as more conventional threats.

This article I wrote for Arbuthnot Latham’s Spring Journal considers some of the common risks that a family may face but can also predict and manage in advance. It explores how it is advisable for a family to develop some common principle and structures while the risks are still theoretical conundrums rather than when they become personal to any one individual or group.

Some ‘what if’ topics and questions to consider include:

  • Family jobs e.g. what should be the criteria for joining the business?
  • Family communication and decision making e.g. how do you make decisions and what happens if you don’t agree?
  • Ownership e.g. Who is entitled to own shares? What are the rules around shareholders exiting?

 

The article also considers the benefits of writing down your family’s conclusions on some of these issues in a Family Constitution or similar document.

Families can never expect to predict every risk in advance but opening up communication about tomorrow’s predictable problems today will help you to cope better should the unexpected happen.

To read this article in full, click here

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