Except Velax was a recognized heir. There was no title associated with it, but Jenred had been training him up in King-ing for, what, a year? Something like that. Velax wasn't the only one (Maurus and Drake were both similarly trained), but he certainly isn't someone Jenred would have worried about taking the throne. Not to mention that per Arcaean customs and law, Jenred abdicated when he was no longer capable of Ruling, and Velax was duly elected by the assembled nobility, so he is the King, no ifs, ands, or buts. Following the precedent set with Dentara, Jenred would likely be first among equals at whatever other title he takes as his primary one.
I am quite certain Jenred and Velax can reach an amicable arrangement, especially since Jenred hated most of the Kinging work, and the older he got the more he thought his religious title of Paladin was the more important one, especially given how the Invasions went.
As far as the Empire goes, as long as Jenred is ceremonially granted the historical title of "First Emperor" or something like that (I've always been partial to Phoenix Emperor, resurrecting the old Empire as it were), then he's unlikely to kick up any fuss about Velax being the Second and Current Emperor.
Jenred's never needed actual game mechanic power to get anything done, and I don't see that changing. He wouldn't have trained up Velax if he didn't think he could continue working with him, after all.
