Strategic Succession Planning: Ensuring Legacy and Prosperity

Strategic Succession Planning: Ensuring Legacy and Prosperity

Family-run businesses are a pivotal force behind the MENA economy. In the GCC alone, they make up 50% of private sector GDP. Ensuring growth and preservation is important therefore not only for the families themselves, but for the region as a whole.

Succession planning - ensuring that a business continues to thrive across generations - is no easy task. But with sufficient time, planning, and resources - it is possible. In this article, we examine what this involves in more detail.

Jun 12, 2024Education- 4 min

Common challenges

Why are family fortunes lost? Clearly, there are many potential causes, but a lack of planning is at the root of many of them. It’s not surprising that planning does not take place, as the topic of death, loss of control, and choosing heirs is highly sensitive and easily avoided.

In the Middle East, planning is all the more necessary, as families can be large. Experience and common sense dictate that as the number of people involved increases with each successive generation, the potential for miscommunication and misunderstanding also grows. Family conflicts connected with succession issues have been intensifying in recent years.[1]

Even in the absence of interpersonal tensions, the Shariah inheritance law means that, without care, fortunes can become fragmented and decision-making cumbersome. An example might be a large villa in France owned by fifty beneficiaries that falls into disrepair and neglect as a result.[2]

For families whose fortunes have been created by the still-living older generation - as is common in the Middle East - the challenges of succession will be completely new. So, how can they prepare?

What good planning looks like

Many of the appropriate steps to ensure a smooth succession apply to families worldwide and are well documented. These steps ensure that the following questions are considered in time:

  • Who will receive what? (assigning investments, pensions & life insurance, savings, businesses, and real estate to individuals)

  • What should the money be used for? (e.g. charitable causes, restrictions on access by age)

  • How can wealth be preserved over time? (i.e. unwise investments, unanticipated taxes)

  • Is a structure required to facilitate long-term goals? (e.g. a trust, company or foundation)

Formally adopting a holistic plan to address the above can help to avoid the 3 ‘D’s (Disputes, Disappointment, and Dissipation), which are the cause of many lost family fortunes. In addition, the head(s) of the family must take steps to prepare and educate the next generation who must eventually take a leadership role.

In our separate white paper, Intergenerational Wealth Management, we cover these steps in more detail. 

The need for local knowledge

Many Middle Eastern families have begun to address the increasing complexity of their finances by professionalizing their approach to wealth management. This has often meant adopting a more corporate structure as well as consulting - and hiring - non-family members for their expertise.

Many organizations in the UK and US have experience in supporting multi-generational businesses in transition, advising on issues such as external financing, governance, and asset protection. This international expertise can be highly relevant as Middle Eastern families are increasingly globally oriented and must deal with cross-border issues.

Knowledge of regulations (e.g. regarding transparency) and the Shariah legal context (e.g. how local trust/foundation structures can be deployed effectively) is clearly critical. This is difficult for outside experts as, compared to other regions (e.g. Europe), many of the regulatory structures and precedents are still being created.

Perhaps as importantly, understanding social norms (e.g. as regards etiquette between generations) plays a pivotal role in identifying potential tensions and how to resolve them. This knowledge is not easy to acquire from the outside, especially as it, too, is constantly changing.


Resolving succession problems, even if done in due time and with due care, is and always will be a difficult and delicate process. Families across the Middle East are increasingly addressing this challenge by adopting a more formal approach with outside advisors.

All families are unique, and simply attempting to ‘drag and drop’ what has worked well elsewhere, before, or in someone else’s situation is not enough. Instead, families should ensure that they arrive at a plan that suits their goals, culture, and legal environment, to maximize the chances of success.

[1] PwC
[2] Collas Crill

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