The Hidden Fragility of Inheritance
Succession planning has become a pressing topic among wealthy families. Recent surveys show that over half of high-net-worth individuals have wills or estate plans. On paper, this is progress. Yet when tested in practice, these plans often reveal deep flaws. The problem lies in the nature of the will itself. It is a static document designed to pass assets from generation to generation. But wealth is not static. Businesses grow, investments shift, tax rules evolve, and family dynamics change. A will drafted ten years ago may fail to account for new realities today. Even freshly written wills can create unequal treatment, leaving heirs confused or resentful. Disputes then emerge, draining resources in court and damaging the relationships that succession planning was supposed to protect.
This fragility has become visible in headlines. Families once confident in their planning find themselves embroiled in disputes that consume both wealth and goodwill. What was meant to provide clarity often delivers only ambiguity. The result is a paradox: more families are planning for succession, yet the risks of conflict and erosion remain as high as ever.
We’ve seen it first-hand. A British entrepreneur in his seventies had written a will years ago with the best intentions. Three children, three equal shares. But the shares of what? One owned the family business, one the London home, the third a classic car collection and a fragmented set of private equity investments. Equal in value on paper, wildly unequal in risk and liquidity. The result? One sibling had to sell under duress. Another sued. The third moved abroad and cut ties. The will was legally sound, but structurally and emotionally disastrous.
The Self-Administered Family Office (SAFO) offers a stronger answer. Instead of treating succession as a one-off legal event, it builds an institution capable of adapting over time. By combining corporate governance with bespoke share classes, a SAFO can separate control from value, gradually involve heirs, and preserve tax efficiency across generations. It shifts the focus from “who inherits what” to “how the family manages wealth together.”
This is not estate planning. This is institutional design.
Why Traditional Succession Planning Breaks Down
A will is often seen as the cornerstone of responsible family planning. But its simplicity is also its flaw. A will is an end-of-life directive, not a governance mechanism. It offers no framework for adaptation, no process for training heirs, no protection from shifting regulations. It records a founder’s wishes, often in admirable detail, but fails to provide the architecture for execution across time.
Life moves faster than legal paperwork. A family might change jurisdictions, an investment portfolio might double or halve, or a second marriage may introduce children with entirely new claims. A well-written will might stand up in court, but it rarely stands up to complexity.
Another anecdote comes to mind. A European client, second-generation wealth, inherited a substantial stake in a wine business. The will left him “50% of the family holding company.” But there was no agreement on how decisions would be made, no exit provisions, and no mechanism for buyout. His cousin, the co-heir, wanted to sell to an international group. He didn’t. Stalemate. The winery suffered. It took five years and four court dates to resolve. In hindsight, the family needed not a will but a structure.
Even where intentions are pure, wills often result in dislocation. One sibling inherits a business. Another inherits shares. A third receives a property. Everyone feels short-changed. No one understands the full picture. The family story frays. Tax adds pressure. Forced sales become necessary to settle liabilities. Lawyers are called in. By then, it’s too late.
This is not a matter of bad drafting. It’s a structural failure. And one that repeats, generation after generation, for those relying on static documents in a dynamic world.
The Self-Administered Family Office as Structural Solution
The SAFO is not a document it is an operational institution. Built on corporate law rather than trust law, it establishes a legal vehicle that endures. The board governs. Decisions are documented. Shareholder rights are codified. Succession becomes a process, not an event.
Central to this is the use of alphabet shares. With the right corporate design, a founder can retain full voting control while allocating growth or income rights to heirs. Voting shares anchor strategic authority. Freezer shares cap estate exposure. Dividend shares allow income flexibility. Growth shares transfer upside potential in a tax-efficient, gradual way.
We worked with a family in Spain who owned three regional logistics firms. Their old plan was to gift each child a company. The unintended result? Competing siblings, conflicting interests, and duplication of cost. We redesigned the structure using a SAFO. A single-family holding company was formed, with three subsidiaries beneath. The parents retained voting control. The children each received non-voting growth shares across the entire structure. Board seats were earned through merit, not bloodline. The family now runs its logistics empire as a unified institution, not three fiefdoms. The parents sleep better. The children work together. The capital is protected.
Heirs in a SAFO are not passive recipients. They become shareholders with defined roles, reporting obligations, and financial alignment. They are brought into the process early, without compromising founder control. That involvement matters. It’s the difference between stewardship and entitlement.
Another example. A client in Monaco had two children, one deeply engaged in the family business, the other pursuing an academic career in the US. The SAFO allowed her to grant dividend shares to both, but reserve growth shares and board roles for the child involved in operations. No one felt short-changed, because expectations were managed and formalised in advance.
The SAFO also allows families to embed policies that transcend personality. Shareholder agreements can define dispute resolution mechanisms, succession triggers, buy-sell clauses, or even educational requirements. One client requires all next-generation directors to complete a six-month placement at a third-party firm before being eligible for appointment. It’s written into the Articles. It’s not personal, it’s institutional.
Institutional Continuity, Strategic Stewardship
The strongest argument for the SAFO is this: it creates something that survives the founder. That might sound simple, but it’s a radical shift. Most succession plans are about transfer. The SAFO is about continuity. Control passes not in a vacuum, but within a defined framework. Heirs don’t inherit assets. They inherit roles.
And importantly, the structure itself is jurisdictionally robust. Families are global now. Children live in different countries. Assets are cross-border. A trust in Jersey might be challenged under French law. A will in the UK might not apply to properties in Hungary. But a company? A company endures. Shares can be transferred. Boards can be rotated. Tax can be planned. Governance stays intact.
From a tax perspective, the advantages are clear. A properly designed SAFO allows the founder to benefit from Substantial Shareholder Exemption, Business Property Relief, and Capital Gains Tax planning all within the corporate form. There is no need to fracture the asset base to achieve liquidity. The company holds, the heirs receive shares, and the institution continues.
We've worked with families who previously sold assets simply to solve liquidity gaps created by poor planning. Under a SAFO, those same assets now sit in subsidiaries, with dividends used to meet obligations and shares passed down under structured agreements. No fire sales. No estate freezes. Just continuity.
And beyond preservation is alignment. Investment strategy can be set at board level and codified. Families can embed environmental or social criteria, sector preferences, risk thresholds. The portfolio reflects the family’s values, not just its balance sheet. It becomes a vehicle not only for capital protection but for legacy expression.
One client, a fourth-generation family with interests in energy and infrastructure, used the SAFO to pivot the family fund toward renewable energy. Not because a will told them to, but because the board, composed of three generations, agreed to it. That’s institutional intelligence at work.
From Fragility to Governance
Succession is the ultimate test of family wealth. Not whether it can be handed over, but whether it can be held together. Most structures fail because they confuse form with function. A will is form. A SAFO is function.
The question is not whether you have a plan. The question is whether your plan has structure, governance, and the flexibility to absorb change. Families who treat wealth as an institution, rather than as a sum of parts, are the ones who preserve it. A will may provide legal cover. A SAFO provides resilience.
It’s not for everyone. It requires vision, discipline, and a willingness to engage across generations. But those who make the leap find something remarkable: less friction, more clarity, better decisions, and ultimately, the kind of unity that no document can impose but the right structure can sustain.
We’ve seen the difference, time and again. A fragile estate can destroy a family. But a well-run SAFO? It can turn a family into an institution.
