If you own a family business, you are facing one of the most difficult issues in planning your estate. Not the tax issues — those are easy to handle by comparison, but the family dynamics surrounding to whom you are leaving your business.
Often, you — the founder — will have a very different view of the business than do your adult children — the future beneficiaries.
- To you, the business may represent the heart of the family legacy; to your children, it may be unimportant, or even an outmoded and unwanted burden.
- There may be some children involved in the business, and others not involved; how do you ensure that all are treated equally?
- Suppose one or more of the children not involved in the business wants to become involved — or the child or children in wants out?
- Maybe the time has come for the business to transition to professional or employee management — although you just cannot imagine giving up control.
- Perhaps a sale to a competitor or even liquidation is the right move; how will you feel to see your life’s work on the auction block?
These are just a few of the situations that can cause difficulties in arriving at a plan which meets your family’s needs. You can see why the statistics show that only about 30% of family businesses survive through more than one generation, and only about 10-15% make it through the third generation.