Preserving family equilibrium for a pain-free inheritance

Private Banking - 26/04/2016

During a conference held in Geneva by Edmond de Rothschild, several members of Friends of the Countryside shared their inheritance experiences. They stressed the importance of communication in this crucial phase, especially if the future of a family business is in doubt.

and solutions for successful intergenerational inheritance." 
 Friends of The Countryside were invited to share their experiences of a theme that is close to their hearts, at an event held at Château de Pregny in Geneva. The sessions were run by Catherine Motamedi, Head of Wealth Solutions at Edmond de Rothschild in Switzerland.


Everybody insisted on the need for family members to keep calm and civilised for a smooth handover. But equilibrium can only be maintained throughout this complex process if family members make significant efforts to communicate, and prepare for it meticulously.

Informing and explaining

Francisco, a member of this association of landowners and entrepreneurs, set the tone: "The key is to keep the peace within the family by keeping its members informed and explaining all the issues to them. If you don't, the very future of the family business may be at risk."

Michael on the other hand considered that external factors such as the economic and political situation should be reflected in the process, but he confirmed that maintaining a healthy relationship between generations was paramount. This is truer than ever as nowadays, members of a family often live in several different countries, with all the resulting legal and tax implications.

"The smart option when it comes to passing on inherited wealth is to be assisted by a family mediator who will be able to weigh the pros and cons in an unbiased, emotionally detached manner", he added.

Balance of power

By consulting an external, neutral intermediary, the head of a family will be less tempted to "hang on" to his responsibilities too long, or conversely to rush to resolve the problem by entrusting the inheritance project to his descendants. "I thought I was doing the right thing, but I made a big mistake when I asked my son to draw up an inheritance proposal himself. The project he initially came up with involved him taking over the company on his own and 'putting me out to pasture'. I refused. Our company then went through a very difficult three or four months. This was a tough crisis to overcome", explained Michael.

He has now reached a compromise with his son, with a structure that keeps him involved in major strategy decisions during a transitional period, while relinquishing all the operational decisions to his son. "As with any relationship, there are endless misunderstandings. You must never overlook the power struggle that goes on between father and son", continued Michael.

Clarity and fairness

Guiseppe reckoned that a successful inheritance must meet two key criteria: clarity and fairness. "The heirs must never feel that they are being taken for a ride, otherwise the result will be family strife. Assets must be shared fairly between siblings, irrespective of their birth rank or gender." But you have to bear in mind the incidence of traditional, unwritten rules on the sharing of assets, such as primogeniture or the preference given to male heirs. "These cannot be dismissed out of hand. "Who am I to challenge a system that has been operating for hundreds of years?", Guiseppe pointed out.

On this matter he mentioned that landowners often use their land as the basis for creating a business: "One way to keep the heirs happy is to separate the ownership of the land from its commercial exploitation before sharing out the assets and roles."

But handing down an estate involves not only the handing down of wealth, a tangible, immovable or financial estate or a company, but also intangible assets, values and a vision. However, it is important not to be over-supportive.

According to Guiseppe, trying to impose upon the heirs their future risks undermining the process. Laying down principles and guidelines is fine, but you shouldn't dictate to them what to do, and you must allow them to make mistakes.

"After all, he added, the aim is not to release our children from their responsibilities. We shouldn't make life too easy for them either!"


All the participants thought it helpful to prepare an inheritance well in advance. Including Albert, a member of Young Friends of the Countryside. "I have three small children and I am thinking about it already", said the entrepreneur, still in the early stages of his career.

Involvement in a philanthropic project is often viewed as a useful way of transmitting values without imposing them, and uniting the family over the long term.

Invited to come up with the key to a successful inheritance at the very end of the discussion, Michael said: "My was only through her gracious intervention that I was able to get back on speaking terms with my son."



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Further reading


Inheritance: a key moment of truth