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    Generational succession

    Area of expertise

    Generational succession, through the transfer of ownership to the next generation of a family, or to business colleagues, involves several branches of the law.

    This applies whether the transfer of ownership involves an industrial company, farm or a family’s holiday home. In these transactions, personal and emotional factors must also be taken into consideration.

    Our lawyers have lengthy and wide-ranging experience of the legal areas involved, particularly in relation to generational succession. A transfer undertaken while the senior party is alive can bestow a number of advantages on the older generation and their heirs. It is equally important to know what will happen should generational succession not take place until after the demise of the senior party. Dalan is regularly appointed administrator for estates under public administration and our legal team has extensive experience and leading expertise when it comes to matters of inheritance and probate.

    Our clients are owners of businesses and companies, property owners, management teams, boards of directors and general managers in firms undergoing generational succession, farm and forestry owners, as well as private persons.

    How Dalan can help you

    We assist clients by clarifying the situation and the interests to be protected. In order to conduct a rational and conflict-free succession, the assets to be retained by the senior party, or parties, are clearly identified, as are those to be transferred.

    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

    Jon Norvald Evensen
    Partner

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    Svein Steinfeld Jervell
    Partner

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    See the whole team
    Generational succession involves a number of specialist areas
    • Taxation
    • Company law
    • Inheritance law
    • Contract law
    • Value added tax
    • Stamp duty
    • Pension insurance and pension agreements
    • Acquisition of real property, concession law
    • Agriculture Act
    • Allodial rights