NETHERLANDS Law and Practice Contributed by: Willemijn van Duren and Rowena Zee, Arcagna
8. Family Business Succession Planning 8.1 Succession Strategies
volatility and evidentiary issues (eg, proving holdings and transaction history). 7.2 Planning Considerations In the Netherlands, digital assets and online accounts should be addressed expressly in the estate planning process, because their control and transfer are often driven not only by succession law but also by pro- viders’ terms of service and by privacy/confidentiality constraints, which can create practical access barri- ers for executors and heirs. A practical first step is to map the testator’s “digital estate” (eg, email, cloud storage, social media, sub- scriptions, domain names and crypto assets) and to decide what should happen to each category (eg, deletion, archiving, transfer to heirs, or memorialisa- tion). Consider appointing a dedicated “digital/online executor” and leaving clear instructions (eg, whether a Facebook account should be converted into a memo- rial account or deleted; who may access cloud pho- tos; whether messaging history should be disclosed or erased). Access planning is crucial. Common approaches include keeping an up-to-date list of logins and recov- ery codes in a secure place, using a password man- ager and sharing only the master password, or using a “digital vault” accessible to the (digital) executor. In Dutch practice, digital vaults are offered by civil- law notaries as well as by other market participants. Where available, platform-specific legacy tools should be used (eg, Facebook settings, Google inactivity preferences, and an Apple ID legacy contact). Crypto-assets require special attention: control typi- cally depends on control over private keys and access credentials, without which assets may be irretrievable; where crypto is held via an intermediary, additional KYC/AML requirements may delay or complicate transfers. While Dutch law is still developing in this area, increas- ing awareness and the growing use of platform legacy tools and practical access arrangements are shaping current practice, and cross-border estates may also be influenced by US-style uniform approaches to fidu- ciary access to digital assets.
In the Netherlands, family business succession plan- ning is typically centred on transferring qualifying business assets in a manner that preserves access to the main Dutch business succession tax facilities (for gift/inheritance tax and, where available, income tax roll-over treatment). For this, common strategies include the following. • Lifetime or deathtime transfer of qualifying busi- ness interests, often preceded by “clean-up” steps to separate business assets from non-qualifying/ investment assets. • Governance/control structuring (eg, through a holding structure and/or a Dutch STAK) to separate economic entitlement from voting control and to facilitate staged transfers within the family, could be combined with a family statute. • Valuation planning and substantiation – in practice, parties often prepare a valuation on a discounted cash flow (DCF) basis. Discounts for lack of mar- ketability may be considered in limited cases, but are typically applied cautiously. For real estate businesses, the planning is more chal- lenging. Especially where the activities also involve third-party leasing of real estate because their eligibil- ity for the business succession facilities is significantly reduced or even excluded. In those cases, solutions may include partial insurance cover and/or earlier life- time transfers, with transfer tax implications consid- ered upfront. 8.2 Legal and Tax Considerations Dutch business succession planning strategies are primarily shaped by the conditions attached to the Dutch business succession tax facilities (in both gift/ inheritance tax and, where available, income tax roll- over treatment). As a result, families often focus first on whether the assets qualify as business assets rath- er than investment assets, and whether the relevant (cumulative) requirements can be met. In practice, this frequently drives pre-transfer restructuring (to “clean
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