The succession series: The rising generation

Part three of a six-part series on succession planning for family businesses by Elena Grima Tortell, Senior Associate, Deloitte Legal. Succession demands more than legal and financial planning; it is personal, emotional, and requires strategic vision. This series offers practical insight into leadership dilemmas, rising generation readiness, family offices, and governance for Maltese businesses preparing for generational change.

Every succession plan involves two critical perspectives: the outgoing generation’s need to transition leadership, and the rising generation’s readiness to assume it. Succession planning can tend to focus more on protecting assets, optimising structures, and addressing the objectives of current leadership, while the aspirations, capabilities, and readiness of the next generation are relegated to an afterthought. Succession is a process of passing the baton and it can only be passed if the rising generation is ready to receive it.

Legal structures and estate planning provide the framework for an orderly transition, but they are only half the equation. The other half lies in identifying, mentoring, and preparing the next generation to become capable stewards of a family’s business and its financial legacy. Achieving this, however, is rarely straightforward.

Understanding the readiness question

As parents and business leaders, it is common to conflate two separate aspirations: the desire for our children’s independence and success, and an expectation of their involvement in the family business. But rarely does one pause to distinguish between what we hope for them versus what they actually want.

In the context of a family business, two fundamental questions must be asked: First, does the next generation want to be part of the business? Second, and equally important, do they possess the capability to lead it? A child may want to be involved in the business but lacks the capability to run it. Conversely, a capable child may choose a different path. Understanding the next generation’s interest, commitment and capability is essential for any meaningful succession plan.

Consistent, constructive, and non-judgemental conversations are therefore essential. They encourage a shared understanding of individual intentions, aspirations, and business values which help facilitate alignment on desired succession outcomes. Ultimately, such dialogue contributes to preserving family harmony while ensuring the long-term continuity and sustainability of the business.

Elena Grima Tortell, Senior Associate, Deloitte Legal

To support and assist in these decisions, families should establish clear frameworks and objective assessment criteria, complemented by the involvement of independent experts. Embedding an impartial perspective into the process will help mitigate bias, or the perception thereof, and will promote transparency and ensure greater confidence in the outcome of the process.

Prepare the rising generation

Parents spend years preparing their wealth for their children, yet far less time preparing their children for that wealth or for the needs of the business that generates it. Too often, we assume that the right moment will come or that things will work themselves out. But proper succession takes time. Preparing successors means equipping them to understand the family’s wealth and business, the responsibilities that come with it, the structures that protect it, and the values that should guide decision-making. It also means addressing the specific capabilities needed for both stewarding the family’s wealth as well as driving and growing the business.

This preparation is a lifelong process that unfolds in stages. The first stage begins in childhood, long before wealth or succession is ever discussed. Children develop the core values, behaviours, and principles that shape the decisions they make throughout their lives. They learn responsibility, humility, hard work and respect through observation, not instruction.

As they mature, this foundation should be complemented by basic financial education. Schools don’t teach the practical skills needed to understand and manage wealth, so families, supported by experts, must bridge this gap. A strong foundation in financial literacy, the basics of corporate governance, understanding money, investments, and taxation, is essential for stewardship of both the family’s wealth and the business. Leading a business also requires operational know-how, strategic thinking, and the capacity to exercise effective judgment in complex and challenging circumstances. Focusing on these capabilities ensures the next generation can better understand their own strengths and weaknesses, which leads to clearer discussions on business succession and family wealth governance.

For those identified and interested in taking over the business, their development must be intentional and structured. This should extend beyond formal education to mentoring, shadowing, and progressive exposure to real decision-making. By gradually building involvement and responsibility, a successor develops the confidence, judgement, and management skills needed to lead.

But succession is not a one-way transfer of knowledge. The next generation brings fresh perspectives, new skills, and a different understanding of a changing world. The best leaders listen and successful transitions often blend continuity with innovation.

Don’t wait until retirement is on the horizon

Without preparation, even the best-designed plan can fall short. The next generation inherits the assets but not the knowledge to manage them. They inherit wealth but not the values to steward it. This is why preparation cannot wait until retirement is on the horizon. It must start years earlier, through education, involvement, mentoring, and trust. When families create space for genuine dialogue and real participation, they develop successors who are not just capable but confident stewards of their legacy.

Successful succession is ultimately about the people within the formal structures. It requires empathy, communication, and a willingness for each generation to learn from the other. Invest in the rising generation. Listen to them. Prepare them. And when the time comes, trust them to carry the baton forward.