Succession Planning in Family Investment Companies: What Should Families Consider?

As part of our new series on Family Investment Companies (FICs), today we explore why succession planning is at the heart of FIC structures and what families should be thinking about.

Why Succession Matters in FICs

FICs are often designed to preserve wealth across generations, but without careful planning, they can lead to tax inefficiencies or even shareholder disputes. Careful planning of the structure is essential to ensure the FIC is fit for purpose and to avoid future complications.

Key Considerations for Families

• Trust Shareholders
  If a trust holds shares in the FIC, review the trust to confirm it is appropriate and that trustees have the necessary powers.
• Wills and Permitted Transfers
  Every shareholder should ensure their Will aligns with the FIC’s Articles, particularly around “permitted transfers.” Families should discuss succession early—especially if shares are intended for bloodline transfers only.
• Powers of Attorney
  Review existing LPAs to ensure attorneys are suitable for managing FIC shares. If not, consider a standalone LPA specifically for FIC interests.
• Marriage and Nuptial Agreements
  Pre- or post-nuptial agreements can help protect FIC shares in the event of marital breakdown.
• Family Charter
  Some families use the creation of an FIC as an opportunity to set expectations through a Family Charter—covering governance, succession, and long-term vision.

Joined-Up Advice Is Essential

A seamless approach between corporate advisers and private client teams is vital. At Charles Russell Speechlys, our focus on Private Capital ensures that FIC structures are robust, tax-efficient, and aligned with family objectives.

In summary, proactive succession planning is key to unlocking the long-term benefits of FICs. When built on solid foundations, FICs are powerful tools for wealth preservation.