BELGIUM Law and Practice Contributed by: Alain Van Geel and Emilie Van Goidsenhoven, Tiberghien
1. Contemporary Cultural Considerations in Succession Planning 1.1 Social and Cultural Attitudes In Belgium, succession planning is shaped by a long- standing cultural balance between private property rights and familial transmission. The preservation and growth of family wealth across generations remain deeply rooted in Belgian society and are closely linked to a generally conservative outlook on inherit- ance: assets are expected to remain within the close, biological family. This cultural background explains the central role of the forced heirship regime, which protects descend- ants and, to a lesser extent, the surviving spouse. Belgian law has traditionally imposed significant limits on freedom of testation through the concept of the reserved portion. Although recent reforms to succession law have modernised and simplified this framework – most notably by fixing the descendants’ reserved share at half of the estate regardless of the number of children – the protection of children remains a fundamental and deeply embedded principle. In addition, the tax environment strongly influences succession planning trends. Both small and large fam- ilies are increasingly aware of the importance of plan- ning. Because of the favourable tax rates applicable on gifts (especially in relation to movable assets and family businesses), transfer of wealth is generally done during life and not at death. For that reason, a wide range of structures are used in Belgium at the occa- sion of the wealth transfer to maintain a certain degree of control and benefit of the transferred assets at the level of the donor. Also, gifts retaining usufruct are a very often used scheme in Belgium. There is a desire to pass on assets earlier than in the past. Moreover, planning is sometimes more complex in the case of reconstituted families. Finally, while charitable giving and legacies to third parties do exist, they generally play a secondary role compared to family transmission. Overall, succession planning in Belgium remains predominantly family-ori- ented, combined with a strong respect for mandatory family rights.
1.2 Wealth Profiles and Industry Influences In Belgium, a few recurring “wealth cohorts” are typi- cally seen. The first and most traditional cohort con- sists of multi-generational family capital holders and family business owners. Their wealth is often concen- trated in family holding companies and long-standing operating businesses. Client expectations within this group typically focus on maintaining asset consoli- dation, avoiding fragmentation among heirs and pre- serving family control over key assets. Succession planning therefore places strong emphasis on control mechanisms such as centralisation through a neutral entity ( société simple or private foundation), share- holder agreements, usufruct structures and internal blocking mechanisms within corporate structures. A second cohort consists of clients whose wealth is primarily composed of liquid financial assets, such as securities portfolios and private equity investments. These clients seek to organise the transfer of wealth while remaining attentive to the structure and regu- latory constraints of their investments. They gener- ally wish to retain a significant degree of control in order to continue managing investment strategies and decision-making. A third cohort, which has grown significantly in recent years, comprises cross-border and interna- tionally mobile families. The vast majority of families now have at least one member living abroad. New generations often establish their residence in several countries before settling permanently. With Belgium being a very small country in the centre of Europe, many Belgian residents transferring wealth need to take foreign taxation regimes into account because of family members living abroad, tails applying in relation to a previous residency or assets held abroad. Client expectations in this context are shaped by the need to address international legal considerations, including the interaction between Belgian succession planning and foreign legal systems. Planning must therefore co-ordinate Belgian civil law and tax rules with the legal and fiscal implications arising in other jurisdic- tions.
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