Either to individuals or companies, to preserve patrimony is always a concern. However, in front of situations of economical crisis, to protect assets becomes an urgent and primordial question. And this is no wonder: when instability prevails the market, everyone, without exception, is susceptible to loss and damage.
Today, we are living through a rather chaotic period in the global economy. Due to the pandemic of the new coronavirus, several countries had their currencies and stock exchanges shaken, afflicting individual investors, entrepreneurs, and shareholders. This led to increased interest in asset prevention and shielding measures, such as financial, tax, succession, and corporate planning practices.
After all, it is known that there is nothing more dangerous to a patrimony than the sum of vulnerability and unpreparedness.
The succession planning and the crisis
Among the measures mentioned, we want to draw attention to succession planning, in particular, for this legal practice has a very unique relevance in the preservation of assets and in the organization of people and companies’ patrimonial future.
First of all, it is worth saying that the main purpose of a succession planning is to structure the transference of assets from a controller (company, or individual) to their heir. For this reason, this practice is strongly linked to post-mortem issues – a connection that, although not unfounded, needs to be clarified. Succession plans also relate to a patrimony’s present: they are a way to ensure the integrity of an asset over the years, including those in which it is administered by its original holder.
In this way, it is possible to understand why this practice is so attractive during times of crisis. Everyone wants patrimonial stability in the short, medium, and long term and that is exactly what a succession planning provides, making it a wise bet in troubled times like the one we are living now.
The possibilities of succession planning
Another aspect that contributes to transform succession planning into an alternative of great potential in the face of economic market instability is its flexibility. In a succession plan, the controller has total power to define what will happen to the assets he holds, in various scenarios.
In practice, this means saying that it is possible to establish, in the same project, the future of the assets in view of the prospects of removal, retirement or death of the holder; or, also, delimit clauses to prevent the sell of certain assets or their administration by specific heirs. And all this can happen through various legal measures, such as wills, creation of holdings, lifetime donations, etc. The possibilities are many and the great advantage is that, in all of them, who decides what happens is the patrimony original controller itself.
At the Stürmer & Wulff, we always work to ensure organizations assertive answers to market challenges. And considering the current economic scenario, where a crisis threatens the financial security of individuals and corporations without distinction, we have spared no effort to fulfill our purpose.
If we have aroused interest in the practice of succession planning and you want to know more about how this measure can help you deal with the impacts generated by the COVID-19 crisis, do not hesitate to contact us. We put ourselves entirely at your disposal.