 | Greg Ast
is president of Legasus Group (www.LegasusGroup.com), a family business consulting firm offering services designed to enhance clients' growth, success and profitability. Legasus Group has a staff of trained professionals - specialists in management, family-owned businesses, strategic planning, profit enhancement, finance, international business and executive development that work with family-owned and privately-held businesses. You may contact Greg at (316) 681-0444 or by e-mail at gast@legasusgroup.com. |
Business Consulting
2002-05-01 15:03:00
Treating family fairly
: I am 72. I need to be doing something about planning for my business to go on, but I am having a problem figuring out how to take care of all of the kids…those who want to be involved and those who don't. My son is active in the business but my two daughters are not. How do I take care of all of them… fairly… in my planning?
Greg Ast
Question: I am 72. I need to be doing something about planning for my business to go on, but I am having a problem figuring out how to take care of all of the kids…those who want to be involved and those who don't. My son is active in the business but my two daughters are not. How do I take care of all of them… fairly… in my planning?Answer: Without knowing other details of your situation, I'll make a few assumptions when offering recommendations. The first (and most important step) will be to ensure your own financial security. I'll assume you have a plan in place that provides sufficient funds to address your needs over the remainder of your lifetime. Until you have been taken care of, it will be difficult to hand over business authority or to transition ownership of assets. Second, you will need to understand your children's desires and needs. Do they want the business to continue in the family? Do your daughters have children that may be interested? Do your daughters want ownership in the business? I would strongly encourage you to communicate with your children regarding their interests, needs and concerns. Through constructive dialogue, several options may emerge that meet most needs. Finally, it's important to recognize that the health of the business is likely to ensure future opportunities for all family members. Any plan will need to protect the viability of the business. If you were to pass on equal ownership to all three, would your son be able to effectively lead (assuming he's the leader)? Do you have a board of directors - preferably with some outside, non-family directors - to protect the interests of all owners? Also remember, "fair and equal" are not the same. If your two daughters have no interest in business ownership, what other assets might be considered in your planning? Treating your three children fairly may mean your son receives majority business ownership and your daughters receive other assets. Of course, there are often grandchildren to consider, as well as your personal philosophies regarding gifting, trusts, use of funds, etc. If you are like many business owners, most of your wealth is tied to the business. In that case, there may be a way for those interested in the business to eventually purchase your interest or those of other family members.Your desire to begin planning is to be commended. I encourage you to build on this first step by communicating with your children, as well as utilizing professional advisors that can help identify the many estate and business planning options that exist.
