If you run a family business, you may have planned to hand down your business to your children, nieces and nephews, or other “younger generation” loved ones for years. Yet, if you haven’t taken certain steps to prepare for this eventuality, the integrity of the business you’ve worked so hard to build – and the relationships that members of the younger generation(s) have with each other – could be compromised in ways that are potentially preventable.
If you follow this blog regularly, you’ll know that the process of formalizing a business succession plan is vitally important to the smooth transition of ownership between your generation and the next. Yet, you can’t take your legal efforts for granted. Formal succession planning is undoubtedly important. Yet, so is preparing your heirs for whatever plans you might have in mind.
Big plans, big feelings… big trouble?
Passing along authority to run and ownership of a family business is often a very emotional reality. Some of your intended heirs may not have any interest in running the business but others may have a deep desire to carry on what you’ve started.
No matter how you plan to move forward with succession, you’ll need to inform all of the members of the younger generation – whether they want “in” or not – of your plans. This is important for several reasons. First, they need to be aware of what is coming down the way so that they can plan. Second, they need time to emotionally process your wishes, for better or for worse. Finally, if they know what you want and your wishes have been made clear, they will be less likely to challenge them in probate.
By taking time to prepare your heirs for what will be confirmed when your will is read, you’ll better ensure that your wishes are honored and that your loved ones aren’t unnecessarily stressed by the decisions you’ve made. Should you have questions about how to move forward with succession, don’t hesitate to seek legal guidance.