When an estate plan involves an independent business owner who wants his or her family to benefit from the value of the business, a lot of important questions will need to be answered. Most importantly: Will you leave your business to be managed by your children, or would your children rather do something else?
Fifty years ago, this probably wouldn’t be a question that business owners would aks. In the past, children usually took the reins of the family business after mom or dad became too old to manage it. Modern families are different. Parents tend to encourage their children to follow their own path. If the kids are interested in taking over the family income maker, that’s excellent. If they’re not, parents are usually happy as long as their children are happy.
This, however, makes family business succession a little complicated. For example, what if your daughter wants to take over the family business and your son does not. How do you make sure that your daughter and your son receive the same amount of inheritance? Also, how do you make sure that your daughter is ready to take over your business operations?
Fortunately, there are a lot of different ways to organize the succession of the family business to ensure that all of your children are treated equally. However, planning will be required and you will need to communicate those plans to your children to ensure that they’re in agreement. This may involve learning a little bit about business succession law, in addition to holding some tough decisions and clear family discussions to ensure that everyone is on the same page.
Source: Forbes, “Don’t Let Your Family Business Die With You,” Mark Eghrari, accessed Feb. 23, 2018