January 25, 2021
The Pros And Cons Of Having A Family Member As Your Business Successor
When you started your business many years ago, there was the thought that one day you would pass it down to your family members. While this sounds like a scenario that will have nothing but a happy ending, that may not always be the case. Though there are many benefits to having a family member as your business successor, there are also many unexpected challenges that may present themselves. If you are considering this option but want to learn more about it, choose to work with an estate planning attorney that Seattle business owners trust at the law firm of Frey Buck.
An Established Business
As for one of the best pros of having a family member as your business successor, giving your children or others the chance to inherit an already well-established business is often at the top of the list. By doing so, this can simplify the management process for you, while not forcing your family members to build a new business from scratch that may or may not succeed. But before opting for this, discuss any concerns you may have with a Seattle estate planning attorney.
Already Possessing Experience
In most of these situations, family members such as children or others have already spent many years working in the family business. As a result, they possess years of valuable experience that may make it easier for them to keep the business growing and profitable in the years ahead. Since they have been able to observe firsthand how various problems were handled, they will be able to overcome obstacles much more effectively than others. If you believe this will be the best option for your business, consult soon with experienced Seattle business attorneys.
Family Tensions
While having a family member as your business successor can have many pros associated with it, there is also the chance it could lead to family tensions. For example, if you have been satisfied with the direction of your business but now have family members who want to try new things and take it in another direction you fear may result in failure, don’t make an immediate decision on your succession plan. Instead, discuss your concerns with family members as well as with knowledgeable Seattle business lawyers you know and trust.
Career Limitations
For some family members who may be expected to take over the family business, the fact is this may not be the career for which they are most passionate. By assuming the leadership of a family business, children or others may face the reality of severe career limitations that can ultimately impact their future income and livelihood. Thus, before assuming your family members are eager to take over your business in the years to come, have serious discussions with them about what they want out of life. Afterward, you may want to reevaluate your plans of succession by meeting with a business lawyer Seattle clients know will give them sound advice that is objective and reasonable.
Identity Crisis
In some situations, a child or grandchild who takes over a company is always thought of by customers and others as the person who never quite measures up to their parent or grandparent. As a result, they may suffer an identity crisis and feel as if they can never measure up to the expectations others have of them as the new owner. More importantly, these feelings can lead to poor business decisions or even selling the business, which was something you never envisioned.
To learn more about the pros and cons of a family member taking over your business, consult today with a Seattle business attorney at Frey Buck.