Ever since you started your business, it has been your dream to pass it on to your children. You want them to love it as much as you do. You want them to have a source of income. You know how hard it was for you to find a career path, so you hope to give that to them and make their lives easier.
There’s a big question that you have avoided, though: Can they actually do it?
Experts warn that you have to be careful and realistic. Do not force a fit that isn’t there. Don’t give them the business just because that has been your dream or your plan forever. Think about what is really best for them and the company.
The proper heir
If you have multiple children, first consider who would make the right successor. For instance, maybe you have always planned to pass the business on to your firstborn, but you can see that your second child actually has the skills and personality to run the company. Your firstborn does not. That doesn’t mean you cut them out completely, but you want to arrange the roles to play to their strengths. You need to leave the business to the right person.
Their own wishes
Another thing that can feel difficult to parents is to think about their children’s wishes, not just their own. Sure, you always wanted to leave the company to the children, but do they want it? Or do they have another career path in mind? Don’t try to force them to fit into your view of the world or it’s not going to be good for the family or the company.
Another thing parents with multiple children have to consider is how to divide the company. Do all of your heirs need a job? Do they need equal ownership? If one wants to stay uninvolved in the work, do you also take them out of the ownership position so that those who actually run the company get all of the value? If so, do you need to divide your other assets accordingly so that one heir does not feel slighted or left out?
Asking questions and having conversations
You can clearly see that you have a lot of questions to ask and a lot of things to consider. As you do so, make sure you have some conversations with your heirs. Find out where they stand and make choices with them, not for them. At the same time, make sure you look into all of the legal steps you and your family will need to take.