You have spent a substantial portion of your life building or continuing a successful family business, and you have some children (or other family members) who are active in the business and others who are not. How do you handle an equitable distribution of your estate without adverse impact to family relationships and/or operation of the business? We find that it takes significant thought, discussion, introspection and planning to do it right.
To get started, among the issues you will want to consider are:
We have seen successful business succession plan implementation during lifetime and/or at death include: significant education regarding the planning issues and process among you and all other involved parties; and, a coordinated effort among your advisor team, including legal, accounting, financial, and often times a family business counselor and/or family business psychologist. More often than not, there are, or may be, latent or patent family conflicts or issues, such as rivalries, hostility, distrust, ego, guilt, control issues, and/or spousal input, which must be addressed as part of a successful planning process. The psychological part of planning process is often a significant hurdle in that family members, including yourself and others in the founding generation or existing leadership, are sometimes reluctant to engage in and/or acknowledge or commit to addressing issues. We find the succession planning process is much more effective if all parties are open to discussion, self-reflection, and resolution of current or future conflicts and relationship issues –as well as seeking professional help, as needed.
Planning ahead is critical for a smooth business transition. We recommend starting this process sooner rather than later. Without any planning, the result can be intrafamily discord, potentially including litigation, and short-term or long-term damage to, the demise of, or loss of control over and/or ownership of the family business.
Each family and family business has its unique issues and goals, and succession planning involves significant and complex tax considerations, so it is important to work through them with advisors who have extensive experience in this type of planning. We have decades of experience with family business succession and counseling regarding the above and other issues, and are available to help you design and implement a plan, and to revise that plan along the way if desired or needed.