Values - Based Succession Planning

 It is estimated that the biggest transfer of business assets in Australian History will happen between 2005 and 2030 as businesses built on the shoulders of economic growth generated from the ‘greatest generation’ (those born between 1910 and 1944) and the ‘Baby Boom’ generation (born between 1945 and 1965) are transferred at death to their children and grandchildren.  

Most of the financial planning industry tends to focus on what happens to the "Fortune" rather than what happens to the "Family".


If you leave it to chance, probably not.

The Chinese have a proverb:   

"Wealth tends to pass through three generations. The first generation creates the wealth; the second lives off it; the third squanders it."

This tendency of "inherited wealth and business" is called "Affulenza" (the wasting of wealth)

How do you ensure that your business is valued, nurtured and grown in the stewardship of your children?


Our "greatest generation" literally fought for our world in World War II and came back and embarked on a period of economic growth and baby making, with a strong push toward giving their kids a "better life" than they ever had.

These kids were the Baby Boomers - they had more opportunity and more privileges than their parent's ever had. They had plenty of time to experiment and they rode the technological and information revolutions, creating businesses that their parent's hadn't even imagined.


Every parent wants their children to have it ‘better’ than they did, and this is reflected in the examples they live and the values they teach – or fail to teach – their children and grandchildren.

 However, many sucession planners buy into the myth that business estate, retirement or financial planning is only about transferring
‘the Money, Assets and Business’ rather than  
'the quality of life and core values.'

Instead of starting with what they want their children and grandchildren to stand for and accomplish, many bypass these issues entirely and focus instead on the fortune rather than the family.

As a result,Business Succession Planning and Retirement become focused on trust documents, notarized signatures, coverage amounts and funding rather than how these useful tools implement the vision and goals of the parents. 

As a long-time practicing personal business coach and trainer, I’ve seen clients (and the professionals who should have served them better) in a rush to put their pens to paper rather than first discussing the client’s priorities and values.

Here are two quick & simple processes to help you create a more favorable outcome dealing with these people:
  • Start with a thinking-and-valuing exercise that amounts to a quiet personal assessment of
‘What really matters?’

Honestly consider what kind of example and values you want passed down to your children.  Describe  the kind of steward you have been of what you have earned and invested so far.

Write down the core values, dreams and objectives that you want to matter in the lives of your children – and yes, your grandchildren!

The end result should be your own personal ‘Values and Vision Statement’. It should reflect what you and your children as adults will be known to stand for.  Email me for a template to help you do this.
  • Next, is an exercise called: 
‘I Suddenly Died Today and Didn’t Get to Say Goodbye.’

Even though it may be uncomfortable, take about 30 minutes to jot down what would actually take place over the next two years following your sudden death today versus what you hope or guess or think might happen.

This is often a real ‘eye-opener’ if you own a business, have investments, are paying for a home, have debts, children or plans for the future.

Most of us want to die in our old age, at home in bed, without pain, still looking good, surrounded by our adoring family and with all our bills paid and our dreams attained. That may happen if we plan it for it.

These two steps can be done in either order. They are best done in private, but always in a relaxed setting. With these steps complete, Succession Planning has a context to help you plan your business succession and asset protection for your children and grandchildren.

In the end, Business Succession Planning is about legal and financial arrangements drawn up by accountants and lawyers, but they should always be based on a solid foundation of ensuring that your ‘core values’ are reflected in the planning and documents you sign.

This is only the beginning. Get to know clarity. Email me, Mike Kennedy...

No comments: