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Uncertain times – when we are reminded of our own mortality – can nudge us to think about the future. Senior family business leaders, for example, may turn their attention to transferring ownership of the enterprise and wealth to the next generation.

For Elena Hoffstein, a lawyer with Miller Thomson LLP and expert in estate and family business succession planning, communication is key for achieving favourable outcomes. “Open and effective communication among family members and across generations can ensure there is a strong foundation of trust and respect among the various stakeholders,” she says.

Many business leaders consider setting up a trust for passing along assets or property in a manner that is tax efficient and ensures privacy (wills often become matters of public records while trusts are private). “Trusts help to achieve many objectives, such as reducing the tax associated with a death in the first generation so it’s not a burden on the family business,” says Ms. Hoffstein. “A trust is also a good tool for addressing blended family situations and protecting the – sometimes competing – interests of children and spouses from current and previous relationships.”

In addition, a trust can help to protect vulnerable family members, such as people grappling with mental health issues or addiction – as trustees ensure the management and administration of wealth for the beneficiaries, she explains.

In recent years, some families have turned to “incentive trusts” to address the issue of “trust fund babies” (as beneficiaries lacking purpose or responsibility are commonly described). However, Ms. Hoffstein believes trusts linking inheritances to certain milestones, such as finishing university or getting a job, “may not work and need to be crafted with care to deal with the ‘what ifs,’” she says. “As a lawyer, I see lots of challenges with these kinds of trusts. For example, what if the beneficiaries cannot complete their education for health reasons?”

An emerging trend – the purposeful trust – aims to transform bequests into lasting legacies. Families wanting to encourage entrepreneurship, for example, could stipulate that a portion of the funds is allocated to a family bank, where heirs can secure loans supporting business endeavours.

Such tools could further enhance a trust’s potential to help “beneficiaries grow into their wealth,” she says. “Trusts can also serve as tools to assist the transition process by advancing dialogue and education.”

When business families face complex challenges, external advisers can bring objective viewpoints to decision-making related to business strategy and ownership. “We all know that we don’t see things so clearly when there is emotional involvement,” says Ms. Hoffstein. “That’s why it’s important to establish clear parameters for how the family communicates, how they make decisions, and how they resolve conflicts.”

Advertising feature produced by Randall Anthony Communications. The Globe’s editorial department was not involved.