Generational succession

In a succession between the generations of a family, it should be assessed whether the party or parties who will continue to run the family business should pay a sort of ‘dowry’ in the form of easy terms for the transfer out of consideration for the business and its further development. If one re-directs one’s focus, and views the inter-familial relations as such, then it should be considered whether an unequal distribution of assets may provide grounds for conflict and, be this the case, how much importance should be attached to this.

Furthermore, one should, in consideration of the business and the owners, have a view as to whether passive owners are desirable, and whether the fact that share ownership, which perhaps does not yield returns commensurate with underlying value, may cause conflict. In connection with this, possible locking-in mechanisms – resulting from a ‘low’ valuation for those who wish to be bought out – should be considered. But if a generational succession is to be enacted through a transfer to business colleagues, interest will be concentrated to a greater extent on the financial settlement. Moreover, in these cases, differing interests need to be weighed against each other: those of the business and its future, those of the senior parties, and those of the new owners.

We provide assistance with the following:

• Tax advice
• Pension advice
• Drafting of shareholder, pension and transfer agreements
• Drafting of company documents for restructuring, including mergers, demergers, capital reductions and dividends
• Drawing up of wills, testamentary contracts, declarations concerning refusal of legacy and advancement of inheritance

The transfer of an agricultural property is also the transfer of a commercial undertaking, and many of the elements for consideration are the same. In addition, where an agricultural property is concerned, one has to check to see whether there is an allodial right connected to the property, and whether the person taking over the property must apply for a concession to do so and whether he/she will be subject to a residential obligation. Moreover, the senior party or parties often express a wish to continue to live on the property, or retain or pass on other rights. Such rights may, for example, be right of use, right to hive off land, the right to live in a cottage on the farm after retirement, forestry rights, power rights, parking and boat mooring rights, as well as the right to harvest fruit plus various kinds of pre-emptive rights.

Vi can provide assistance in these matters:

Assessment of allodial rights, concessionary and residential obligations

• Tax advice
• Drafting of transfer agreements
• Application for concession
• Registration of transfers and encumbrances
• Drafting of wills, testamentary contracts, refusal of inheritance and advancement of inheritance

When transferring private properties, attention will tend to be concentrated on the subsequent distribution of the estate and the potential equal distribution of the property between the children. Furthermore, senior parties often wish to leave a holiday home to the next generation in order to liberate themselves from the burdens of ownership, while retaining a certain influence and right of use.

If the next generation is to take over the family’s holiday home, a joint ownership agreement should be drawn up to govern use, maintenance, the sale of a single owner’s share, and the sale of the whole property.

We can assist you with the following:

• Drafting of transfer agreements
• Drafting of joint-ownership agreements
• Assessment of concessionary and residential obligations
• Tax advice
• Application for concession
• Registration of transfers and encumbrances
• Drafting of wills, testamentary contracts, refusal of inheritance and advancement of inheritance