The last will.
Capital for future generations.
Those who have accumulated and compiled assets have a natural interest in ensuring that the estate keeps growing, provides a foundation for success for future generations and creates happiness and joy. Careful preparation and drafting of the will is key in cross-generational asset development.
Avoiding unnecessary burdens
People should start sorting their affairs long before life comes to an end.
Tax aspects and the preservation of family assets may be good reasons for the bequeather to transfer assets to future heirs already in the prime of life. In addition to providing tax advantages, gifts also enable bequeathers to dispose of their assets as they wish – compulsory portions do not apply here. In this respect, gifts can be an effective instrument for designing asset development strategies.
However, most people do not think about this until events occur that remind them of their own mortality and leave them concerned. There are a million reasons to love life. But only one to fear death: we don't know what will be. However, we do know that our passing may not be easy on the friends and family we leave behind. And it is quite obvious that we would be imposing an unnecessary burden if we leave them with "messy affairs".
Letting go and getting involved
Surprisingly, estate planning is only reluctantly done in our country – a country that otherwise praises foresight and methodical approaches. Drafting a will reminds us of our own mortality, they say, and the topic of death is avoided by modern humanity like the devil avoids holy water. This explanation is not really convincing, however, as we are too much realists to so vehemently suppress the possibility of death.
Maybe we really struggle with much smaller problems here? After all: the thought of having to completely let go of everything and hand it to someone else costs quite an effort, no matter if in our imagined scenario we are dead or just totally powerless. Being a people of action, we deeply loathe falling into passivity.
Those interested in philosophy and religious sciences note, rightly so, that letting go already during one's lifetime was recommended not only by Christian mystics, but already in Buddhism and by Laozi, the founder of Daoism, approximately 600 BC. They all agree that letting go clarifies and enriches one's perspective on life and enhances one's spiritual strength.
If it suits you, the drafting of your will may become an opportunity to break free from pesky everyday details and focus more intensively on the relativity of existence. This may cost quite an effort at first, but will ultimately relieve a lot of stress.
Planning beyond your own life
or pragmatic individuals, on the other hand, a last will is a tool for planning their world sensibly and smartly. Beyond their own life. They thus leave behind a sense of dedication and responsibility and prevent conflicts between surviving family members that can be long-lived and may tear families apart.
Relationships with others play a predominant role in estate planning. In the best-case scenario, you can focus on people you feel close to. Often people wish to express gratitude through their bequests. Bequeathers convey to the next generation that they are devoted to their heirs' future circle of life and want to send them on their way filled with happiness, confidence and strength. In this respect, the bequeather makes a positive impact on the future of others and grows beyond himself.
Inheritances are rarely intended as fuel for a fun spending spree. Even smaller amounts should be used for something that the recipient will fondly remember for years to come. For bequeathers it is a valuable experience to devote time to figure out how they can support loved ones through their bequests.
Paving the way for future heirs
Even with the best of intentions it is not always easy to do good. Sometimes heirs are in over their heads and are unable to manage the estate with any kind of a long-term perspective. The bigger the estate, the more challenges are faced on the path to lasting happiness.
Sometimes the testamentary gift is just too complex for the heirs. Properties with rented flats require special knowledge and management skills. Shareholdings can turn into a frustrating experience for laypersons of any age who do not have any business experience.
Therefore it is an important part of estate planning to create the prerequisites for ensuring that heirs do not make shipwreck of their inheritance. For example, bequest types that do not leave heirs with overly complex asset management structures, such as usufruct or inheritance payments in the form of a monthly pension, should be selected. In the case of corporate ownership and participations, it may make sense to appoint fiduciary partners who monitor and manage companies on behalf of the heir. For estates that comprise different types of assets and require professional, long-term management, executors are often used as a trusted third party. They manage the estate in the spirit of the bequeather while, at the same time, protecting the interests of the heirs. In addition, they often act as a liaison between joint heirs and mediate in conflict situations.
Overcoming discord and disputes
When there are individuals among the heirs that have a strained relationship with the bequeather, it is even more important to start estate planning early. Worrying about festering personal disputes when facing one's death can make this already difficult and sensitive situation unbearable. Without the calmness and strength needed to facilitate a reconciliation, an unnecessary pressure to find a solution builds; this pressure not only affects the bequeather but also the future heirs.
Serious conflicts often stem from hurt feelings which, more often than not, were not caused with intent. Often, the parties involved are too proud to take back what has been said or done. We have had a lot of positive experiences with mediators in cases where the parties involved had reached an impasse and were not able to resolve the deadlock without help. Just as is the case with tense business negotiations, if you are under a lot of time pressure when going into a meeting, the "opponent" may be tempted to secure short-sighted personal advantages for themselves.
In some deadlocked situations it may not be possible to achieve reconciliation. In this case, the bequeather may have to resort to a variety of options available under inheritance law to keep the portion of the estate that the heir receives to a minimum. There are some effective weapons out there to accomplish this; however, the resulting legal disputes also dampen the happiness of the other heirs that the bequeather bestowed a generous gift upon them. If inheritances are meant to enhance the bright future of the heirs, inheritance battles invariably result in disappointment to all concerned.
Therefore, long-term orientation and fresh courage when preparing your last will are key, especially when personal relations are emotionally charged. A prudent and psychologically smart approach can create surprising solutions.
Sending your life's work into the future
Handing over a life's work to which you are spiritually and idealistically connected presents even more challenges. It is essential for entrepreneurs to begin succession planning as early as possible since this allows them to observe how the new head of the company performs his duties and which measures may be necessary to compensate for deficiencies.
Often companies go through a challenging process to "reinvent themselves", e.g., when company founders leave the business and a new entrepreneurial spirit evolves.
Sometimes, individuals spent their whole lives on a specific idea or business, something that truly inspired them and the continuation of which is extremely important to them – often also because of colleagues who have contributed much and developed considerable expertise. Unfortunately, sometimes heirs do not have any real appreciation for what was given to them and, due to a lack of respect, may literally "break apart" the life's work. Will this really happen? Nobody knows. Bequeathers do not want to burden their heirs with such a decision of conscience.
In cases like this, we strive to find solutions that permanently secure an independent existence of the life's work. Foundations work well in some cases as they protect the life's work from influences that contradict the spirit of the founder.
They allow bequeathers to use their estates as a tool for shaping the future. To do so, they must look beyond their natural time horizon and develop concepts that promote long-term asset development, but, at the same time, are compatible with the heirs' perspectives and lifestyles.