Remember, Your Family Doesn’t Have to Get Your Business

Does your child essentially think that your business has to go to them when you’re done running it? Are they not just waiting in line but expecting that this is part of their birthright?

Now, wanting to leave your business to your children is understandable. You want to give them a source of income. You want to create a legacy. You want them to carry on what you started.

All of that is fine, and you can choose to do this if you’d like. But it’s also important to remember that they don’t have any legal right to that company. You’re under no obligation. You can do anything with it that you’d like.

As one expert put it: “Your family has the right to your inheritance but not necessarily to run your business.”

There are situations where it’s just not a good fit. Maybe your heir has never shown any interest, and you know they’re not ready. Maybe they’re not financially responsible. Maybe you’ve tried to teach them, and they just can’t grasp it; the unfortunate truth is that you think they’re not intellectually able to take on such a committing profession.

If that’s how you feel, don’t assume that you have to do business succession planning and hope for the best. You could actually utilize another type of estate planning entirely: selling the company and leaving your heirs the money from the sale.

No matter what you decide, make sure that you talk to them as you look into all of your legal options. You need to ensure that your expectations match up with theirs and that you’re all on the same page.