Wealthy families need to have a comprehensive plan of the future by carrying out continuing discussions with their successors in order to preserve wealth and expand it, rather than losing what they have earned due to a lack of planning.

'One of the greatest threats to wealth occurs when the patriarch or matriarch passes away or becomes unable to manage the family's wealth,' says Rodney Allen, managing director and wealth advisory head of clients and markets at Barclays Wealth.

'Threats include death taxes, loss of liquidity during probate, family and business partners fighting which damages the business, and ongoing inadequate management that destroys value. These threats can be reduced or even eliminated with appropriate planning.'

The process of succession planning is not simple and a lot of effort has to be put into the process, especially when the families chart their visions.

Families should set their future goals and chart a course to get there.

'As more entrepreneurs are reaching an age where they are looking to reduce their involvement in their businesses or come to the realisation that they won't live forever, they are turning to wealth advisers to plan the passing of assets to the next generation,' Allen says.

Therefore, the initial stage of brainstorming is a very important aspect of succession planning, de Haller says.

'It is very important to brainstorm and put on paper what are the issues of the family, what are the targets, and what they would like to do.'

As the economy changes rapidly, succession plans should anticipate future changes to reduce the impact of a sudden economic downturn on the family's wealth.

'All the planning done now will not necessarily be the right one for the next 20 years,' de Haller says. 'We have to be very careful to keep a certain flexibility during the process of succession planning.

'Problems and changes in the economy cannot be solved easily but at least if it is anticipated, you can keep some flexibility.

'You can try to better organise for the next generation and that can help a lot.'

The increase in overall wealth of Asian families over the past decades has led to a rise in the tendency for wealthy families to include succession planning as part of their wealth management.

'Asian families tend to face bigger obstacles in preserving their accumulated wealth from one generation to the next,' says Philip Jehle, head of private clients at Lombard Odier Darier Hentsch (Asia).

'That is because they have very traditional family values, such as male [domination], eldest should inherit and/or run the family business rather than based on meritocracy.

Also the patriarch is often reluctant to discuss [succession planning] with his eventual heirs and, to a certain extent, with their trusted advisers,' Jehle says.

In Hong Kong and Asia, succession planning is increasingly done by wealthy families as more institutions offer seminars and advice on the topic.

'Professionals in Hong Kong and Singapore are trying to share and lecture these various families on succession planning and I think there is an increase in acceptance [of the subject],' Jehle says.

Other than the various services provided by institutions to help their clients in areas such as wealth management and succession planning, organisations such as the Family Business Network (FBN) provides a channel for wealthy families to exchange experiences.

'FBN was created by some European families who decided to find a way to exchange experiences, share research with universities and specialists, and make plans for their next generation,' de Haller says.

Other than learning from past experience, professional advice is essential during the planning process as every family faces different issues and a tailor-made wealth and succession plan is needed.

'Each solution depends on the family and their actual situation,' de Haller says.

'Therefore, taking the time to discuss and brainstorm is crucial.'

Many wealthy families in Hong Kong have ties to high-tax jurisdictions and may hold citizenships in a few countries for various reasons, so planning ahead may help minimise multijurisdiction tax exposures by establishing appropriate structures relevant to the needs and circumstances of such families.

However, the problem of taxation may not be the main issue of succession planning for Hong Kong families as estate duty was abolished in 2006.

'I think one of the most important elements is that Asian families have complicated family situations and they face a question of how to pass their business to the next generation and how to select the best [person] to run the company,' says de Haller, who has more than 20 years of experience in the region.

The influences of the traditional culture and values has led to a certain degree of reluctance of Asian families to discuss their wealth.

'Many wealthy individuals are put off by succession planning, either because they refuse to accept their mortality or because they find the complexity of the issues and their solutions daunting,' Allen says.

'If wealth management industry professionals want to give the best service to their clients, they should be relentless in getting families to engage in succession planning.

'Without planning, substantial wealth can be destroyed and the family values lost forever.'