Passing a business on to your children is not the same as listing out other assets in your will. You need a viable business succession plan. You need to consider the future of the company and the employees, not just your own future or your heirs’ futures. It’s critical that you do all of this properly if you want to see your children take over the family business.
To help you, here are a few key tips:
- Start early. Don’t put this off. Some say that it’s best to start about a decade before you want to pass the company on, though five years will work.
- Get the children involved. Work with them and show them the ropes. By the time they take over, they should have years or even decades of experience.
- Have conversations with your heirs. Ask them what they want and what they expect. Do they even want to run the company? How many heirs expect to be involved?
- Be realistic about their skills. Don’t give too much responsibility to someone who isn’t ready for it just because they’re in your family. Do not set them up for failure by giving them jobs they can’t handle.
- Remember that equality, while it sounds nice, may not be best for the company. Are you really best off to leave the company in one capable person’s hands or to split the ownership up between four different heirs who are less capable?
The specifics of your estate plan and your business succession plan depend on your situation, but these tips can help you get started as you look into your legal options.