Many family businesses don’t plan for succession very well. This can happen – or not happen – for various reasons.
As Massachusetts business succession planning lawyers, we know how difficult such decisions can be.
Sometimes the lack of succession planning is due to sibling rivalry. Parents who establish a business may not know how to find appropriate roles for all interested children.
Another possibility is that the founder of the business has remarried and is unsure about how to divide assets among a new spouse and children from a previous marriage.
Or it could be that the parent who founded the business has a hard time letting go. For some people, particularly those used to being in control, the tendency to hang on to the reigns too long can be hard to overcome.
In any case, the challenge is to face the future with clear vision and a rational plan. An attorney with knowledge of business issues and estate planning can be very helpful in making the hard decisions needed to make a succession plan work effectively with a minimum of family control.
As an example of what NOT to do, much attention is turning now to the Murdoch family. In the December issue of Vanity Fair magazine, author Sarah Ellison examines the turbulent succession story involving Rupert Murdoch, the octogenarian media mogul, and his three children by his second wife. The children are Elisabeth, Lachlan and James.
The conflict among the Murdochs shouldn’t obscure the fact that businesses that feature family members often perform very well. “Family firms are managed with lower risk and higher overall financial health” compared to other businesses, according to a research article published last year by the business school at New York University.
Source: “The Lessons of Succession Planning for a Family Business, Murdoch Style,” Forbes, 11-4-11