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Tips for passing a business to your children

On Behalf of | Aug 2, 2022 | Estate Planning

As a business owner who is doing estate planning, passing that business on to your children is a major part of what you want to accomplish. You know well that family businesses often struggle to survive in the next generation. You want to do everything in your power to give your family and your company the best possible chance.

This is a good goal to have, and now you just need to know how to accomplish it. Every situation may be unique, but below are a few tips that can help.

Recognize that your children are different than you

First and foremost, you always have to remember that your children are different than you. Their skills are different, their interests are different and what they want to accomplish with the company may be different. You need to work with them to find out what goals they have and how to apply their skills to the business. This is especially beneficial if you have multiple children and you’re trying to decide how to divide up the duties and responsibilities of the company between them.

Get started early

It’s also best to get this process started as early as you can. It is not fast and it is not easy. In an ideal world, you’ll bring in the family members who are going to succeed you and train them on the job. Some business owners do this for years before officially passing the reins on.

Find out who wants to be involved

Another reason to talk to your children while you work through this process is that you just need to know who even wants to be involved with the company. Many business owners put a lot of their identity, time and energy into the company. It’s very important to them and so they assume that it will be important to their children. But your children may have other career objectives or they may simply not want to take over the family business. You need to know where everyone stands so that you can determine who will be best for this role.

As you do your business succession planning and estate planning, you also want to carefully consider all of the legal options at your disposal.