Pre-succession mediation

Author: Robert Boch

The last will and testament is the testator’s planned and ready vision of the division of the estate. Planning the succession is a process that precedes the drawing up of the last will, which involves collecting information, sharing it, listening to and speaking with one another, and all this within the family or even with successors outside the family. The succession plan is a way of specifying who will be the successor, i.e. the estate beneficiary, and in what fashion. It is also a way of finding the optimal legal method of estate transfer allowing avoiding unnecessary difficulties and complications, which will make life easier for prospective successors. If the parties believe that it is too difficult to complete the process of succession planning by themselves, for example for emotional reasons, they can always take advantage of mediation.

The potential pre-succession arrangements include arrangements of the parents regarding their minor children (dividing of the estate between common children, treating of children from the previous relationships, children’s legal representative in the case of death of both parents, arrangements between divorced parents concerning the division of the estate between their common children and the children from the new relationships) and arrangements with adult children (transfer of the estate including the real property, transfer of ownership and liability in a family business).

It is worth to mention that in the case of a family business the situation is quite complicated because there are three systems overlapping one another: the family, the business, and the ownership. Each of them is based on a specific logic and gives rise to certain expectations, e.g. what does it mean to be a good family member, business executive and owner?
While most jurisdictions divide the estate equally between the children, there may be reasons why one of the children should receive a bigger share. For example, if the adult children have completed their education, the younger children may need a bigger part of the estate to pay for their education. If the testator knows that the power of one of his/her successors trumps a junior successor, this can be an impulse to a pre-succession mediation which may allow identifying and clarifying everything, and at the same time finding the right solution, including a legal way.

The pre-succession mediation is specific because in this case the decisions are not taken by all parties, as it usually happens in a mediation, but by the testators alone. The other participants of a mediation have an important say but are not the decision-makers. That’s why the mediators must be qualified to conduct pre-succession mediation. They must know how to prepare all the family members to participate in the talks and explain to them the structure of pre-succession mediation. The mediator must be able to prepare himself or herself for the mediation in the professional sense, know the special characteristics of the area of succession, and especially in the case of succession in family companies.

For obvious reasons the mediator does not possess the professional knowledge in all areas, which is why he or she must cooperate with external experts, e.g. in the field of law or finance. Also the parties are advised to use the support of experts as a lawyer, an accountant, a psychologist, or another advisor during the mediation, because the mediation settlement may have an influence on tax and legal issues.

The mediator must know what structure to ensure for the talks and how to take care of the present and absent mediation participants. The adjustment of the working method to the particular family is absolutely necessary and this is what is required of the mediators engaged in supporting families in the succession planning process. Such mediators exist, they can be found through the network of Fomento.

About the Author:

Mediator, consultant and trainer. He has worked on the development of communication and conflict resolution since the late 90’s. Member of the Family Mediators Association and the Swedish Mediation Forum. He has been working in Poland since 2005, conducting mediations and training for private individuals, organizations and companies. He is currently a member of the Fomento team.