How we work with clients

Exiting the family business to start own venture

Ronald a 2nd generation family member wants to exit the family business and start his own venture. He is based in Italy and is the eldest of two sons. The matriarch of the family (in her late 70s) has made no plans for succession. She currently has no intentions to transfer anything to her sons (mid and early 50s). He would like to start from scratch and move to the USA, where his wife is from and closer to where his children are studying. He wishes to start a new life and a business running his own family office.

He feels he has contributed the most in terms of skills and time in regards to joint investments with his brother. In many occasions, they contributed disproportionately with respect to their shares. Being the eldest son who contributed a significant part of his life to the family business, he felt like he deserved more recognition. Tensions started escalating during the last two AGMs on dividend retention policies and there was a public conflict picked up by journalists.

Family Goals

• Leave the family business with a fair pay-out
• Streamline the bigger picture e.g. cross guarantees and personal loans to his brother
• Convince his mother to discuss a plan for succession
• Relocate from Italy to the USA
• Set up his own family office, a trust and an investment vehicl

Our Recommendations

• Planning ahead before making any move is key – timing matters.
• Understanding the bigger picture before making any significant decisions is paramount.
• Evaluate the reasons and the implications of relocating and consider the different jurisdictions, opportunities and challenges
• Involve a third-party external to create a safe space and help deescalate family tensions

Outcomes (To Date)

• Enhanced clarity on the bigger picture through our health check report. This helped our client better evaluate his starting point before making a move
• After a productive discussion between family members a conclusion was reached: there is no alignment between siblings and no intention to continue the journey together
• The mother agreed to plan for succession with Stonehage Fleming.
• Help with planning the relocation to the USA and assisting with the setup of his family office

Disclaimer: Please note, all case studies have been carefully anonymised. Although scenarios are based on real life events they have been fictionalised and are an amalgamation of client experiences. All names, locations and occupations have been replaced with pseudonyms.