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African generational tensions regarding the transfer of wealth - 14 image set
Article by: Michael Giraud and Emi Agaba-Oloja
Estate & Succession Planning 10 November 2023

African generational tensions regarding the transfer of wealth

As directors of trust companies forming part of Africa’s largest bank by assets, with a presence in 19 African countries, it is fair for us to say that we have significant experience implementing estate and succession plans for families with African connections. Whilst we absolutely acknowledge that each family is unique, as are their estate and succession planning needs, we do still see threads of commonality when we are approached by families wishing to establish fiduciary structures.

These threads of commonality range from the well documented rationales for establishing trusts (see: Reasons to settle a trust | Standard Bank) to the tensions which sometimes surface when families  implement succession plans to facilitate the transfer of wealth between generations.  It is these sometimes-present tensions which will be explored within this article.  It is important, however, to first set the context regarding the families we work with, namely African or African connected ultra-high net-worth (UHNW) and high net-worth (HNW) clients with a global footprint. For example, a family may originate from Africa, or the first generation may be based in Africa, but quite often the 2nd and 3rd generations are either living or have lived and studied abroad.

This global mobility is important to consider, as it is not only our upbringing which influences us, but also our surroundings and the cultures we are exposed to as adults - our interactions with friends, spouses, colleagues, media, and the general rhetoric we absorb from our surroundings on a daily basis. This will all have significant bearing on our attitudes and values relating to matters such as politics, family, religion, human rights, diversity, how to conduct business and what it means to be part of and operate within a family unit.  It will also influence a person’s views relating to family wealth and how it is held, controlled, invested, allocated between family members, spent, and eventually passed between generations.

Many fiduciaries and advisors have experienced situations where siblings, who had grown up together, have gradually developed divergent views, ambitions, and life objectives. The risk of this divergence increases within a family unit if the sibling’s children (i.e. cousins) have grown up apart and do not benefit from a shared upbringing (if one family lives in Africa and the other in the US, for example). The influence of their spouses and extended family after marriage will  often impact their choices and decisions, widening the gap of divergent views.

So, what are these common generational tensions in the context of our client base?

  1. Mortality - We all know that we will unfortunately die one day, however, we are keen to put off this inevitability for as long as possible.  This may mean that the 1st generation (‘1st Gen’) delays the work that needs to be undertaken to implement a well thought out and successful succession plan, despite the encouragement of the 2nd generation (‘2nd Gen’), who may be more familiar and at ease with the use of fiduciary structures.  This may result in a rushed planning that did not involve the desired levels of communication and consideration that a bespoke succession plan needs.

This lack of communication can from the outset result in a strained relationship with the trustee, especially depending on the terms of the trust and how individuals can benefit from any fiduciary structures that have been implemented.

  1. Control – The 2nd Gen frequently craves control, and the 1st Gen are reticent to cede control of matters too soon (be it for business assets or private assets). This is either because the 1st Gen has a close emotional connection to the assets, they might be unsure of the 2nd Gen’s ability to continue their legacy, or they feel that the 2nd Gen may display lifestyle traits and make choices which they may not agree with.
  1. Independence – It is common for the 2nd Gen to want to prove themselves, whether with family wealth or their own acquired wealth.  This may mean trying new ideas, be it through asset diversification or through approaching matters in a different way.  These changes can sometimes be unsettling for the 1st Gen, especially if their own investment assets and understanding of an asset class or geography has been very successful, and understandably so - who likes change late in life with important things such as a family legacy that have been built up with years of hard work and expert knowledge?
  1. Trust - In many instances, where significant wealth has been generated by the 1st Gen, the individuals who generated this wealth will often be brilliant people in their respective industries/field.  The 2nd Gen may on the other hand have grown up surrounded by the trappings of wealth and, in the eyes of the 1st Gen, lack the drive to succeed or maybe not have the capacity to do so.  This comes down to the 1st Gen not trusting the next generation to continue and grow the wealth that they have built up over a lifetime.
  1. Giving back – We have seen a growing trend for families wishing to give back in a philanthropic capacity, often at the level of the 1st Gen and in the UHNW space.  The amounts gifted can be a cause for tension as the 2nd Gen may not be in alignment with the outflows. 
  1. Investments – We are seeing a difference in risk tolerances, with the 2nd Gen willing to take more aggressive positions, in the hope of enhanced future returns (examples include venture capital, private equity investments, digital assets, and start-ups).  The 1st Gen are more traditional in their thinking, especially if it is an asset class in which they have already amassed significant wealth.

Some families may experience more of these tensions than others and many families with an international footprint and significant wealth will experience variations of these tensions.  Each family is of course unique and will deal with their generational tensions in different ways.  What is certain, is that where a fiduciary structure is used and these tensions are ignored, relationships can become strained, defeating the settlor’s intentions.  The most simple, and probably most effective, solution to this is to seek advice from suitably qualified and experienced advisors.  If a fiduciary structure is to be established, it is also important to pair this advice with the engagement of a trustee that has relevant experience and is familiar working with families with a similar profile, thereby ensuring a seamless intergenerational wealth transfer. 

A version of this article was first published in the ThoughtLeaders4 Private Client Magazine Issue 12, November 2023: Private_Client_Issue_12_-_Next_Gen_Edition.pdf (

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