Corporate estate planning Raul J. Palabrica Philippine Daily Inquirer
October 29, 2009
TOMORROW, THE COUNTRY will go on a death remembrance mode.
For most Filipinos, All Saints or All Souls Day is not complete unless they personally visit the final resting place of their dearly departed.
Those allergic to traffic jams and crowds are expected to stay home and pray in private for the souls of their loved ones, or hear Mass for that purpose.
Regardless of the manner of its observance, the occasion is a reminder of our mortality. That “nothing lasts forever.”
Sooner or later, following God’s design, we will all go and no power on earth can stop that from happening.
This is also the time of the year when preparing for the inevitable usually crosses the mind of responsible parents who do not want the people they’ll leave behind to worry about the future.
But the problem is, taking the steps needed to meet that objective is usually held back by the traditional paranoia about discussing death in the family.
Many Filipinos think that not talking about the Grim Reaper will make it go away or, at least, delay its arrival. And when it comes, the affected parties are forced to improvise and, in the process, suffer the consequences of the lack of preparation.
Succession
In business, implementing a succession plan for key executives who die, resign, retire or are dismissed often suffer from the same problem.
It is something routinely discussed during corporate planning sessions, but is quickly forgotten when management returns to the daily chore of running the business.
Professionally secure executives do not feel antsy about preparing their assistants or whoever they think have good management skills to take over their jobs when the time to step down comes.
The prospective successors are given assignments that allow them to have a feel of the duties and responsibilities of the position, and test their fitness in running it.
This way, the company gets an idea of who among the staff has the gravitas to be considered for promotion if, for any reason, an executive position becomes vacant.
Some managers, however, are not, for fear of losing their job or due to professional jealousy, receptive to the idea of giving their subordinates an opportunity to show their true worth.
If the underling is able to perform better than his boss, the company’s management may transfer the latter elsewhere or, worse, give him his walking papers.
It takes a lot of guts and confidence for a manager to give his subordinates an opportunity to share the limelight with him in the business scene.
Performance
A similar “apprenticeship” practice is observed by some family-owned conglomerates in the country.
While still in full control of their faculties, the business patriarchs put their children in various positions of responsibility to determine their strengths and weaknesses.
The children’s performance record helps the patriarch decide on who to assign where in case he decides to give up active management of the business or when the Almighty opts to end his earthly life.
There is no assurance, however, that the allocation of responsibilities (which carries with it control over a corresponding portion of the family’s resources) made during the patriarch’s lifetime will be maintained when he kicks the bucket.
For various reasons, some siblings may feel aggrieved by the allocation of responsibilities or division of family assets, but keep the resentment to themselves in deference to the old man.
The fight over the estate begins as soon as the mourning period ends.
Settlement
It’s good if the differences are amicably settled within the family. Aside from maintaining harmonious relations among the siblings, the resolution keeps the image of the deceased patriarch unsullied in the public eye.
The problem arises when one or more siblings (sometimes with their in-laws’ prodding) allow greed or amor propio to take over their reasonable selves and go the legal route to claim what they think rightfully belongs to them.
Once the lawyers get into the picture, all bets are off. The fight becomes bruising and no embarrassing family secret is safe from disclosure.
The media will only be glad to oblige if their outlets are used by the protagonists to wash dirty family linen in public that may be help them in their court battle.
The spectacle of siblings, who in their childhood were genuinely devoted to each other, literally going after each other’s throat in the division of their patriarch’s assets can be very depressing. In situations like this, the patriarch must be rolling in his grave or his soul suffering in distress and asking himself where he went wrong in raising his children.
It has been said that business conglomerates go through a three-generational cycle: The founder builds the business, his children make it grow, and the grandchildren break it up.
So if the business survives the jinx, credit should be given to the founder for instilling good values to his children who, in turn, passed them on to their children, and the transmission of good genes continues for generations.
(For feedback, please write to rpalabrica@inquirer.com.ph)
