If you are familiar with the popular HBO series Succession, then you know how messy and dysfunctional things can get without proper planning and the right advisors to guide the family through a transition of your business or wealth in general.
Succession is about a fictional family headed by a patriarch who built a multibillion-dollar family business, is on his third marriage, and has four children, three of which end up working for the family business.
In the show’s first episode, the family patriarch reverses a decision to retire and hand the reigns to one of his children, then promptly has a stroke. Although he quickly recovered, that incident led to ongoing questions about his mental competency. What happens afterward is a made-for-TV drama with family squabbles and power struggles at every turn.
Unfortunately, we see this situation play out in real life more often than not, and while it’s not always avoidable, there are a few ways you can help prevent this outcome.
COMMUNICATION THROUGH FORMAL AND STRUCTURED FAMILY MEETINGS
The easiest way to avoid discord during a family business transition (or your wealth in general), whether during your lifetime or after your death, is to clearly communicate your intentions and desires to your family before any transition or death. This conversation can be challenging, and a vast majority of people continuously put it off and don’t want to accept that, at some point in the future, they will no longer be able to run the business. This is true for both business succession planning and general estate planning.
You have likely spent your entire life building your family business and wealth. Along the way, you probably gathered a team of trusted advisors (accountants, lawyers, consultants, and financial advisors) to help you along that journey. In addition to preparing a tax return, providing legal advice, or trading stocks, they probably also advised you on a vast array of other issues based on their experiences personally or from servicing other clients. If you have not already assembled a team of trusted advisors, we recommend you start building one now. At Marcum LLP, we develop a relationship with our clients and their other advisors to ensure everyone is on the same page and works together as an integrated team. These same trusted advisors can be helpful intermediaries for difficult decisions and conversations with loved ones related to the transition of your business and wealth.