Over the past few decades, Peter H. has built a successful business. Suddenly, an emergency arises and Peter H. is hospitalized. There, he is unexpectedly confronted with a critical decision for the company: he realizes that he is the sole decision-maker for strategic business transactions as well as for the family’s personal finances. It is important to him that his company, as his life’s work, continues to thrive for many years after his retirement – especially if this can be done in accordance with family values and within the family itself.
According to the latest findings, about seven out of ten families are in the same situation as Peter H. They only tackle succession and wealth planning after a so-called trigger event – but usually too late, when the urgency is already high.
Early planning is crucial
“It’s always a balancing act,” says Joel Kieffer, responsible for Luxembourg at Bank Julius Baer Europe. “Family situations are complex because they involve not only laws, regulations, and taxes, but also dealing with emotions and expectations”. In Peter H.’s case, the topics of business succession and asset transfer were frequently discussed; however, the demands of daily life and the complexity of the decisions meant that Peter H. did not actively address the issue.
Often, it comes down to a lack of communication, insufficient preparation of the heirs, and the absence of a “family mission,” explains Joel Kieffer. “When we work with entrepreneurs on their succession planning, we often have to act quickly and strategically”. At Julius Baer, they examine all possible options together.
An important step toward the future
“Our role as neutral advisors with regional expertise is to encourage entrepreneurs to set aside emotional attachments and objectively weigh the pros and cons of each option before a decision is made,” adds Finn Pilawa, Kieffer’s partner in client advisory. According to him, it is crucial to involve all stakeholders in this process, including family members who may have different needs, expectations, and concerns.
This ensures that the chosen path aligns with the entrepreneur’s goals and values while respecting the interests of all parties involved. “Only careful personal financial planning can determine whether the desired business succession plan is viable”. The result is a clear roadmap for the future, transparency for all involved, and ultimately the assurance that the standard of living of the family or generation handing over the business is secured for the long term.
Bank Julius Baer Europe S.A. is the European headquarters of the leading Swiss private bank Julius Baer and serves clients in Luxembourg with the aim of creating value beyond wealth.
The Greater Luxembourg Region team looks forward to hearing from you germany.luxembourg@juliusbaer.com.
A full version of this article is also available in French.
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