The great transfer of wealth from one generation to the next is not a future event in Asia; it is already under way, and it is changing who holds influence within families. Women and younger family members are taking more active roles in family businesses, investment decisions and governance, and the next generation often brings different values, including interests in sustainability, philanthropy and new types of investment.
As a second-generation member of a Chinese-Australian family firm myself, I recognise the pattern: the founding generation’s priority is often preservation and control, while the next generation wants a voice, transparency and room to contribute.
Why buy-in matters
In practice, a family will only commit to succession planning when enough family members support it. Different family members have different priorities, and a plan imposed by the founder without explanation is more likely to be resisted, delayed or challenged later. Planning that begins with the senior generation and then deliberately involves the next generation tends to be more durable.
Ways to involve the next generation
- Explain the structure. Many heirs know a family trust exists but not how it works, who controls it or why it was set up. Education sessions with the family’s advisers can change that.
- Give real roles. Seats on a family council, an investment committee or a philanthropic foundation allow the next generation to contribute and to be assessed before taking on greater responsibility.
- Stage the transfer. Trust companies commonly structure distributions so that wealth passes over time rather than all at once, with support and oversight in the early years.
- Agree on shared values. A family charter or constitution records what the family stands for, how decisions are made and how disagreements are handled. See family constitutions for Chinese family businesses.
- Include spouses and in-laws appropriately. Clear rules on who may participate in governance, and how family assets are protected on relationship breakdown, avoid uncertainty later.
- Plan for capacity. Enduring powers of attorney and clear succession of control in trusts and companies ensure that decisions can continue if a senior family member loses capacity.
The adviser’s role
Advisers can help by facilitating conversations that families find difficult, explaining options neutrally to each generation, and drafting documents that reflect what the family has agreed. Sharing anonymised experience of how similar families approached the same questions often helps families see what is possible.
How we assist
We work with families, their accountants, private bankers and family business consultants on succession planning that brings the next generation in: family meetings, wills and trusts, company and trust succession, enduring powers of attorney and family charters. We can facilitate discussions in Mandarin, Cantonese and English. See also resolving family conflict before it escalates. Justin Chua is a Nationally Accredited Mediator and an Affiliate member of STEP.
Frequently asked questions
When should the next generation be involved in succession planning?
Earlier than most families expect. Involving adult children while the founder is active allows them to understand the structure, take on roles gradually and support the plan, which reduces the risk of disputes later.
How can a family transfer wealth gradually rather than all at once?
Trusts can be structured so distributions are made over time or on certain milestones, and family members can be given governance roles before taking control. The appropriate approach depends on the family and its assets.
What is a family charter?
A family charter, or family constitution, records a family’s shared values, how it governs its business and investments, who may participate and how disagreements are resolved. It is usually supported by legally binding trust deeds and company documents.
Should spouses of family members be involved in family governance?
Families take different approaches. What matters is that the rules are clear and agreed in advance, and that legal arrangements address how family assets are treated if a relationship ends.
Chua Tan Associates advises families, executors, trustees and their professional advisers on estate planning, estate administration and estate disputes, in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice. Victorian law unless stated otherwise.
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