Keeping a small family business alive through the generations is a difficult task. “Only about a third of family-owned businesses survive into the second generation, 12 percent make it into the third, and a mere 3 percent to the fourth, according to the Family Business Institute.” Succession planning is a hot area of estate planning and family ownership adds layers of complexity to the process. Families should obtain the assistance of an independent third party who can assess the value of the business and develop a way to divide it up fairly. It is important for family members to begin communicating with each other as early as possible to develop a strategy for working together. There will be difficulties as visions and goals diverge and disagreements break out. Succession planning involves a difficult and complex process that requires a lot of work and commitment.
See Lewis Braham, Keeping It in the Family, Bloomberg, April 21, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
