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Financial Planning > UHNW Client Services > Family Office News

Bridge the generation gap when succession planning

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We all know the dangers inherent in family politics, especially when money’s involved. Administaff’s Karen Codere, writing in The Business Ledger, offers the following tips to consider in mutli-generational succession planning:

  • Family Council. Identify all parties who need to be involved in the planning, including spouses, when necessary, and then establish a “Family Council” that can serve as a platform for communication among all parties.
  • A 360-degree approach. Include all key positions when creating a succession plan and not just family-held positions.
  • Independent decision-making. Let the children make their own decisions. While it can be heartbreaking for parents to realize their children are not interested in taking over the family business, it is better in the long run to learn that up front and address it head-on than to force an unwanted succession scheme upon them.
  • First-hand experience. If the children decide to carry on the business, make sure plans include how they will first gain some experience. One option is to allow them to work in the business during the summer, under the supervision of a non-family member and for the prevailing wage.
  • Fair decisions. Treating family members fairly in the transition is an important consideration. Leaving an equal percentage of the business to each child, for example, even if only one of them is working in it, generally creates ill will.

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