Your family has spent the last four decades living — and living well — off of your company. You started small and built it into a local business empire. It’s very successful and you’re very proud.
However, there is only so much you can do in one generation. As you do your estate planning, you start thinking about passing that company on to your children. You think they can take it even farther and create a terrific life for themselves and your grandchildren.
As you work through this complex process, keep these helpful tips in mind:
- Make sure your heirs are actually committed to running the company. Talk to them about the effort it takes. One thing that derails second-generation companies is when the heirs take them for granted.
- Train them as early as you can. Get them into the company at a lower level and show them how to run it. This can take years. A sudden exchange of power is too jarring and leads to mistakes.
- Decide exactly how you want to give it to them. Are you interested in selling them your ownership when you retire? Do you want to leave it to them as a gift when you pass away? You can do whatever you want, but there are different steps to take depending on your goals.
- Think about the challenges if you have multiple heirs. You must decide who will be involved and what roles they’ll have. You also need to get the proper documentation in place so that these roles are well-defined.
These tips can help you get started, and you can create a plan that puts your family first and keeps your company strong.