{"id":2949,"date":"2022-08-19T16:42:08","date_gmt":"2022-08-19T16:42:08","guid":{"rendered":"https:\/\/fusionwm.com\/?p=2949"},"modified":"2022-08-25T21:12:04","modified_gmt":"2022-08-25T21:12:04","slug":"succession-planning-for-family-businesses","status":"publish","type":"post","link":"https:\/\/fusionwm.com\/succession-planning-for-family-businesses\/","title":{"rendered":"Succession Planning for Family Businesses"},"content":{"rendered":"\n
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Where there is a desire to pass the baton that is the family business from one generation to the next, succession planning is usually essential. The absence of a solid succession plan can potentially result in family differences and financial complications that may bring down the family enterprise\u2014as well as inflict considerable damage on the wealth of the family members.<\/p>\n\n\n\n

We have seen, more than once, how poor succession planning can lead to conflicts that literally destroy a family. These confrontations commonly binge-eat resources, draining family wealth. Moreover, they tend to cause irreparable harm to family relationships.<\/p>\n\n\n\n

Keep in mind that often it\u2019s one thing to craft and put into place a well-designed succession plan and quite another thing to ensure that the plan endures and is adhered to as expected. While legal structures such as trusts can guarantee the desired transfer of ownership of the family business between generations, they alone cannot guarantee that family members won\u2019t fight over the company and who is at its helm.<\/p>\n\n\n\n

Example: A disgruntled family member can always file a lawsuit. Even if that lawsuit does not prevail, the problems it can cause the family may be considered.<\/p>\n\n\n\n

The upshot: <\/strong>Truly effective succession planning results not only in a technically successful transfer of the family business between family members but also in the mitigation or even the elimination of family dissent due to the transfer. This is the type of planning you should be thinking about if you own a family-run business!<\/p>\n\n\n\n

It can be especially useful for a family to think of succession planning more as an ongoing process than as a one-time event. When succession planning is inculcated in a family\u2019s thinking, the probability of the transfer going well can increase dramatically. For example, by making succession planning a regular and recurring topic on the family agenda\u2014at family meetings, say\u2014it\u2019s likely that many potential complications will get worked out before they come to a head and before the actual ownership transfer.<\/p>\n\n\n\n

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The nature of a well-designed succession plan<\/h1>\n\n\n\n

There are a number of components we see in a well-designed succession plan. Often, the starting point of a such a plan is deciding on the future of the family business. Some of the questions family members usually need to answer include:<\/p>\n\n\n\n