The trust for family succession in the company

The institution of the trust constitutes an important point of reference also for the owner of a company who wants, in advance, to plan the “destiny” of his business reality by projecting it into the future. This is the theme of the c.d. “generational handover” term which normally indicates the phenomenon of succession in the family business. The loss of the entrepreneur, with the takeover of co-heirs who do not necessarily have the same entrepreneurial skills as the founder and, often, not even uniformity of views, constitutes a highly critical moment for the fate of the company. It follows that the efficient management of the generational handover is configured as a need strongly felt in the business world, also taking into account that the prevailing business model in Italy is, as a rule, represented by a small or medium-sized company, belonging to a single family nucleus, and in which the decision-making process is mainly in the hands of the founder himself.

The difficulties encountered by the entrepreneur who is about to plan the delicate process of “passing the baton” in the company, therefore mainly resides in reconciling business interests with family ones, declining them in such a way as to allow at the same time:

a) the protection of the integrity of the corporate assets, a need particularly felt in the presence of a multiplicity of co-heirs who have entrepreneurial skills, propensity for risk and different interests;

b) the protection of the corporate assets both against third parties who approach the family with the specific intention of appropriating the corporate assets, or part of it, and against members of the same family who intend to sell the company to the competition, and therefore, they pose as “unwanted family members”;

c) the identification of who among the existing descendants has a suitable entrepreneurial capacity to be designated as the effective successor of the family business after the death of the founder;

d) possibly retention of control by the entrepreneur until his death.

With a view to the generational handover of businesses, the instrument which, due to its well-known versatility and versatility, makes it possible to avoid, more than any other legal transaction present in our legal system, the risk of the so-called “generational drift” of the company, preventing its disintegration due to the succession mortis causa of the entrepreneur, is the trust. Making use of a trust aimed at the objective of the generational handover of the company, the entrepreneur-settlor transfers a company or a company shareholding in trust to the trustee, a subject usually extraneous to the entrepreneur’s family.

In order for the latter to manage the assets autonomously in the interest of one or more beneficiaries in view of the moment in which, in turn, the trustee will operate the retransfer to the subjects designated by the settlor as final beneficiaries. The trustee therefore becomes owner of the assets conferred in trust but his is a “conform” property in that it must be exercised in compliance with the provisions of the settlor in the trust deed and in the interest of the beneficiaries and, as a result, “segregated”, in as protected by any personal matter concerning the settlor, the trustee and the beneficiaries.

The advantages for the entrepreneur linked to the use of the trust instrument when organizing his own succession are evident.

Indeed, through the trust, the settlor-entrepreneur is able to specifically detail the recipients of the company assets and to establish times, conditions and methods of assignment of the same, thus easily overcoming the problem of the division of the company into quotas in the succession parts assigned to the heirs, guaranteeing the unity of the corporate assets and, consequently, the maintenance of the economic value. This occurs by identifying the trustee as the sole owner of the assets forming part of the family business and establishing that the same maintains this relationship of belonging in relation to the company bound in trust until a certain term occurs (for example, the achievement of a certain age of the beneficiaries) or upon the occurrence of a certain condition (for example, the achievement of professional results or studies and verification by a beneficiary that he has the necessary expertise to manage a family fortune correctly).

Furthermore, by entrusting the family assets to a trustee, the entrepreneur ensures more effective management than would happen with the direct assignment of the assets to the heirs, and this is all the more true in cases where the latter do not have a inclination or a dedication to the care of the company similar to that of the dispo

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