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How do I keep the family business in the family?

On Behalf of | Jun 6, 2019 | Estate Planning |

If you have started a successful business in Illinois, it is no surprise that you would want to keep it in the family. After all, the family business is your legacy. When managed correctly, it can continue to provide a steady source of income for the family, generation after generation.

To achieve this, you will need to ensure the business successfully passes to the next generation. According to CNBC, the first step is creating a sound succession plan. This succession plan should name who will lead the business if the current leader resigns, becomes incapacitated or passes away.

When selecting a leader, it is a good idea to consider who will actually contribute most to the business’ continued profitability. Careful consideration of this has prompted some parents to pass on the family business to the youngest instead of the eldest child, or fathers to pass on a business in a male-dominated field to their daughter instead of their son.

Balancing what is best for the business and what is best for the family can be difficult. After all, a son who had his heart set on running a father’s construction business may feel slighted when it is passed to his sister, even if the whole family knows she has a better business sense. As a result, it is important for families to sit down and discuss these matters together.

It is also important to ensure that a person is ready for the responsibility being thrust upon them. After all, not every child wants to follow in the career footsteps of their parents even when they would be the ideal person for the job.

This article provides information on succession planning for family businesses and should not be interpreted as legal advice.