14 May 2018, Alberto Perez Cedillo

When the family fortune does not remain in the family

Family and money can be a diabolical combination, particularly if it involves the distribution of an inheritance worth millions amongst members of a family business. The history of modern economics has left examples of all classes on this delicate topic.

One of the most delicate moments for any family business, which can cause chaos, is the appointment of a successor. Unfortunately, in Spain according to a recent report only 32% of Spanish family businesses consider the preparation of the succession with utmost importance; and only 25% are looking for a candidate outside the company. The report states that, if it is an external signing, other factors ought to be considered in addition to the technical competence: “The emotional intelligence of the candidates when it comes to understanding the family legacy of the business, integrating oneself into the company and one’s ability to increase the family equity in all aspects.”

Occasionally more controversial than the succession of the head of the company is the distribution of the founder’s personal assets. Ingvar Kamprad, the founder of IKEA, who died last January at the age of 91, has left most of his fortune (close to 60 million dollars) to the family foundation, destined to revitalise the north of his native country Sweden, whilst his four children will only receive a small portion.

This is an increasingly common practice amongst the greatest entrepreneurs. In 2015, Mark Zuckerberg, CEO of Facebook, after the birth of his first daughter, donated 99% of his shares, valued at approximately 45,000 million dollars, to the Chan Zuckerberg Initiative, an organisation dedicated to advance human potential and promote equal opportunity.

A key milestone in managing money took place in 2010, when the Bill and Melinda Gates and Warren Buffett launched The Giving Pledge, encouraging the wealthiest individuals in the United States to donate the majority of their monetary worth to philanthropic causes.