You've spent the last three decades building your business up, but now it's time to pass it down. You want to keep it in the family and hand it off to your children. They'll get it along with the rest of your estate, from the family home to your investments.
However, you know that passing on a business can be far more complicated than splitting up money or traditional assets. What do you need to know about this process?
Work with the children
First of all, you definitely want to work with your children in advance. Do not assume that one of your children will drop their career and take over your business when you need them.
Even if they will, do not assume they'll be good at it. The best recipe for success is simply to get your child -- or children, depending on your situation -- involved as early as possible. Groom them as a successor for years. Show them how to do the job and help them get real experience while you're still involved.
Talk to the children about your vision
You have a vision for your company. You know it is going to outlast you. Talk to your kids about what you want and what you expect. Tell them your vision for the future and what you're doing to get there. Communication is critical and you need to sit down with them and openly, honestly have a productive conversation about the company's future and their role in it.
Speaking of roles, this conversation is the perfect time to find out how much involvement they even want. Say you have three children. Two may want to play a part, but the third may want nothing to do with the family business. Don't take this as a slight. Accept it and be happy that you know now, when it can help you make a succession plan and an estate plan that really fits your family.
Pass the business on before you die
Remember, you do not have to wait until you pass away to give assets to your children. In many cases, it makes far more sense financially and practically to distribute assets in advance.
The same is true with a business. You may be best off to pick a date in advance and then work with your child toward a change of ownership on that date. It may be years off, but at least you both know where you stand. However, at the same time, your estate plan should address what to do if you unexpectedly pass away before that date.
Planning in advance
As you can see, the key to success is to plan in advance as much as possible. Make sure you understand all of your legal options.