When you have two children and one family business, you may not be sure how to pass on your business. You might think that one child has more business sense than the other and want to leave the entirety of your business to them. You may feel that both should receive an equal share.
What you should do in these circumstances will depend on your own personal preferences and what you would like to see for the future of your business. Keep in mind, however, that you will help prevent will contests and disputes if you have a good succession plan in place and talk to your children about your decision now.
How can a succession plan help prevent disputes after your death?
If you plan to leave your business to just one child instead of both, you should consider having a succession plan that helps train that child to take over your role. Discuss your plan with both children, so you can explain why you’ve made the decision you have.
It may help if you give your other child other assets, such as your personal home or property so that you are treating them equally despite the assets they are receiving being different than those received by their sibling.
A good succession plan will go over how to transfer your business on so if you decide you do want to have both children take over the business, it will help you plan for which tasks each child will take over. The plan should help the successor or successors have all the tools they need to keep the business running as expected in the future. You might set up the succession plan to finalize before you pass away, so you can step down and retire at a certain age, or you might have the plan kick in once you pass away.
Good succession planning is just one part of the puzzle. Talking to your children and hearing what they have to say matters, too. Be clear about your intentions early, and you can help your family avoid disputes in the future.
