The most valuable asset you own is your business. You’re very proud of it and you have put decades of your life into it. After you retire, you hope that your children and their children can keep it going for generations to come.
This is a delicate situation because you cannot assume that your child will be great at running your company just because you are. The following tips can help the transition go smoothly.
First of all, talk to the children early on in their lives. Make sure they have a realistic understanding of what the company means. You want them to know that they do not have to run it if they don’t want to do so. However, you also want them to know that simply being your child doesn’t mean they don’t have to work hard. They still have to make their own choices and work hard to craft their own professional identity.
Next, make sure you give them plenty of training while you’re still involved with the company. This can be informal, or you can hire them on. Work beside them. Give them tips. Watch their performance. You do not want their first day on the job to be the day they inherit the company.
Furthermore, you want to set up a clear succession plan and talk to your child about it in advance. Plan for the future of the business. Give your child some freedom to make their own choices, but do not hand them a company with no sense of direction. Do everything you can to give them the tools to move forward in a productive manner.
As you do your estate planning, think carefully about all of your legal options and how you can set your child and your company up for success.