Ricci M. Victorio

We Haven’t A Clue!
July 23, 2008

Dear Ricci: I am the General Manager in my family’s business and worked long and hard to achieve this responsibility. I have three other siblings who, because of other careers, interests or family choices, are not involved in the business. We are all married, with children of our own and still haven’t a clue what our folks have done regarding their estate planning, nor have they begun gifting any stock or assets. How do we approach this delicate, yet extremely important topic without sounding greedy or ungrateful? C.G.

There are two issues you have brought up in this question:

1. You are the only actively involved child running the family business with multiple siblings who may have expectations on the financial benefits of inheriting business assets;
2. The uncertainty of knowing how to plan for your own family’s security.

Hopefully your parents have been proactively working with Certified Succession Planner® and have a plan in place. Hopefully they have made their intentions clear to you regarding how the business will carry on after they are gone. If so, this is a perfect time to establish a Family Business Council to provide an organized and structured forum for your parents to explain the details of their planning. This will also create opportunities to discuss other business affairs (not just the family business) that impact all family members which can preclude surprises later on. Appropriate subjects to be addressed would be:

• Explanation of their estate and succession plan (which hopefully includes you);
• Explanation of family member employment policies & stockholder qualifications;
• Development and communication of a unified vision for family business growth, utilization and succession;
• Wealth management initiatives for non-business related family assets;
• Understanding the business strategic plan (and how you fit in the plan)
• Enhancing family communication & handling tough family issues

These meetings are best accomplished if they are scheduled separate from holiday events, in a location that promotes a professional attitude, rather than over the Thanksgiving dinner table. Understandably, these topics are very delicate and sensitive for most parents to share with their children, and they may be afraid this discussion will create disharmony, especially if some family members misinterpret their best, most loving efforts to do the right thing. Dividing family assets can get tricky as they try to separate the business assets from the rest of the family assets. You may have siblings that feel they deserve business stock and the assumed financial benefits, despite their lack of involvement. Be prepared for a series of tough discussions over whether everyone will be gracefully grateful in being treated fairly, rather than equally. If you inherit inactive business partners who have unrealistic financial expectations, you will have inherited more than you bargained for.

Posted by Ricci M. Victorio on July 23, 2008 | Comments (1)