Legacy by design: Why succession is more than a will
By LGT Wealth Management Head of Family Advisory - Kaajal Prasad
When many Australian families think about succession, they think about ‘the will’ - who gets the farm, who keeps the business, how the share portfolio will be divided.
In my work with families, this is often where some of the most consequential and costly mistakes begin. Succession is more than a will - it is a plan for protecting the family’s legacy, starting today. As Head of Family Advisory at LGT Wealth Management Australia, my focus is helping families consider their structures, governance and conversations that will determine whether their wealth endures.
This work is strongly informed by the experience of our owner.
Learning from a family that has practised succession for 26 generations
LGT is privately owned by the Princely House of Liechtenstein. For more than 26 generations, the Princely Family has relied on clear family governance and succession planning to preserve and grow its wealth.
That experience underpins our emphasis on family governance: the rules, forums and shared understandings that support a durable succession plan. It is a living example that governance is not an abstract legal exercise - it is a discipline that can be lived, reviewed and tested over time.
Inheritance vs succession, ownership vs control
One of the most persistent misconceptions I encounter is the confusion between inheritance and succession.
Most families are familiar with the term ‘inheritance’ – the transfer of assets after death – and less familiar with the term ‘succession’ – the planned transfer of leadership, management and ownership of family assets during the lifetime of the incumbent generation.
Succession enables a planned handover of control while the incumbent generation can still guide and mentor the next generation. It prepares the next generation for the rights and responsibilities that they will inherit, supports business continuity by clarifying roles, authority and timelines, and encourages a mindset of stewardship and accountability.
Succession is less about who gets what, and far more about who gets to control what, under which circumstances, for whose benefit, and for how long.
When we begin working with a family, one of our first tasks is to examine whether the existing structures - often layers of companies and trusts built up over time - are fit for purpose for the decades ahead. Once we map the existing structures, we often find that few of the assets are owned, in the traditional sense, by any one person. Entities own entities. Trustees hold assets on behalf of others. Control may sit with individuals who are not the eventual economic beneficiaries.
Against this backdrop, the inheritance question of “who gets the farm” can be replaced with more relevant conversations about who will control these structures, under what rules, and with what accountability.
Three dimensions of governance
At LGT Wealth Management, we draw a deliberate distinction between:
Ownership governance: who may participate as an owner, and on what terms;
Wealth governance: how assets are structured, managed and overseen; and
Family governance: how the family is organised, makes decisions and remains cohesive.
This multifaceted approach, combined with strong corporate governance, is critical in creating a legacy that will thrive through generations.
For many Australian families, this broader view of governance may be unfamiliar. Yet it is particularly relevant in farming families that often face unique governance challenges. Families may need clarity on who can work in the business, how family members are paid, who makes decisions on borrowing and major capital expenditure, and how non-farming children will be treated fairly. They may also need to balance the demands of seasonal cash flow, debt, drought and long-term land stewardship with the expectations and interests of different generations. Clear governance helps separate family decisions from business decisions, supporting both the protection of family assets and the preservation of family harmony.
Legacy by design
When families do consider the broader context of family governance, it often highlights that the real goal of the family is more than tax efficiency or business returns, it is long-term resilience - financial, relational, reputational – and the protection of the family legacy.
Legacy is not built on good intentions. It is deliberate. Designed. It reflects lessons learned, hardships, relationships, impact and success. It captures purpose, values and behaviours. It is the greatest asset of the family.
Designing that legacy starts with recognising that succession is not the reading of a will. It is a long, structured conversation about control, responsibility and the future. The earlier that conversation begins, the better equipped the family will be when change inevitably arrives.
Your trusted sounding board
QFVG Members are invited to start with a confidential conversation about their family, business and future plans. Contact: Shaun McKnight, Partner, Investment Adviser at LGT Wealth Management on QFVG@lgt.com or to learn more visit: www.lgtwm.com/au-en/clients/qfvg
