If an international business family does not know how to start an inter-family discussion about how to put their house in order before a monumental event occurs – such as loss of capacity or death of the head of the family – a pre-emptive process of mediation can be used to create a safe space in which each key family member [‘P’] is empowered to:
● voice their individual needs, concerns, hopes, expectations and priorities to a non-partisan and beneficially disinterested person, who is bound by confidentiality and has the soft skills to talk to each of them; and
● speak through the mediator, to a multi-disciplinary team of professional advisers around the world, appointed by the family office.
They can then discuss, develop, and agree bespoke and innovative solutions to the problem, ie a holistic strategic plan and roadmap for practical implementation. For example, where P’s in mediation adopt the paradigm of a ‘store of value’ to perceive and reconfigure the attributes and worth to each of them of a luxury asset and the wishes, needs and priorities of each P are asymmetrical, it may be possible to design a bespoke solution to the problem of reconciling their competing and potentially conflicting claims and priorities, by restructuring the legal and beneficial ownership, management and control, use, enjoyment and commercial exploitation of the asset, to their mutual advantage.
Where mediation is used as a process for innovative and bespoke lifetime estate and business succession planning, ideally a qualified tax adviser should be appointed to prepare an estate planning report and a business succession planning report, which should be prepared after an inventory/schedule of the composition & value of the estate & family business has been prepared & before the mediator proceeds to interview each P:
● to confirm their acceptance of the facts set out in the inventory/schedule, so that from the outset all P’s in the process are singing off the same song sheet; and
● about what they each, want, need, prioritise and why.
In the case of an international family, their lawyers and tax advisers – appointed by the family office – can then engage with the P’s through a process of facilitated/mediated discussion to agree a holistic strategy and roadmap for practical implementation that is approved by each P. This may result in the drafting of a family constitution & in the redrafting of the articles & memorandum of association of a family-owned company, a shareholders’ agreement & of an international trust deed, which are no longer fit for purpose. See my article –  ‘Mediation and Estate/Business Succession Planning’. Taxation (Tolley) on the ‘Publications’ page at www.carlislam.co.uk. Over the next 28 days I will be undertaking the ‘Taxation of Art’ Module of the ‘Diploma in Art Law’ Course at IAL’s.