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How can I select an heir to carry on the family business?

The popular HBO series “Succession” explores dramatically a common issue—heirs fighting for control of the family empire. The series centers on the Roy family, who control a media and hospitality empire. As the family’s patriarch ages and suffers health problems, his four children each vie for control of the company. While audiences enjoy watching the heirs conspire against each other and their father as they attempt to wrest control over the family company, many of us may not realize that this sort of drama really happens in family-owned businesses when the founder has failed to establish a business succession plan. Our St. Petersburg, Florida estate planning lawyers discuss what steps you can take to prevent a family feud from destroying your legacy below.

Who Should Take Over the Business?

If you are a business owner, you should create a business succession plan to guide your business through the change of ownership if you die, are disabled, or once you simply decide you no longer want to be in charge. The earlier you start planning for the succession of the business, the better. Your business succession plan should include a succession timeline, which details the circumstances under which you want to pass on ownership as well as when. You will then need to identify your potential successors. This is where it might get tricky.

There are many options when it comes to successors, including friends, relatives, and business partners. Many parents will elect to leave the business to a child. While this is a natural choice, where multiple children are involved there can be issues. You should take an honest look at which of your children want to run the family business and whether they are qualified. At times, the choice is obvious, but other times more than one child could be a viable candidate. Your estate planning attorney may be able to help you set up a business succession plan that leaves the business to multiple heirs. Ownership and control of operations must be clearly defined for such an arrangement to work.

Your business succession plan will further need to include written operating procedures, employee handbooks, and any other documentation essential to the operation of the business. You will likely want to obtain a valuation of the business in the event your selected heirs or business partners need to sell the business rather than run it. Your estate planning lawyer can help you to anticipate and plan for whatever the future may hold so that your business can thrive or bring in the most revenue possible through its sales.