Family Enterprise Continuity

What's the concern?

Business families may choose to not carry on their family business beyond the current generation. This may involve an outright sale of the family business or the disposition of a controlling interest outside of the family group with little or no ongoing family involvement in the business. Fundamentally, monetization of the family business simply substitutes the operating entity with the other assets, opportunities and issues.

What you need to Know

A family enterprise comprises the full spectrum of family assets including personal use real estate, real estate investments, portfolio investments, collections, insurance, trust interest, philanthropic assets and heirloom assets.

Over time, families accumulate and dispose of assets. It is common to lose track of who owns what and how, let alone keep track of the tax attributes of everything. Significant gifts, “investments” in extracurricular activities, education abroad, and loans for a first car or house have been made. Maybe unspoken resentments have built up over the years among the kids. Perhaps there's an expectation that things will be “evened up” in the end. Mom and dad do have wills, don't they? I wonder where they are…Life was very busy while the business was growing and the kids were at home. Little time and attention was paid to the long term view. Wills were prepared when the kids were young; but there are now grandchildren on the horizon. There's that family trust that was put in place years ago; not sure what's in it or if I can just (continue to) ignore it. There have been marriages, a cohabitation, a divorce. A couple of the kids are studying and working around the globe. The family cottage is used less and less. We're losing touch with each other. Holiday gatherings are rare. Dad is thinking he may start a new business. Mom is inclined to set up that private foundation she has dreamed about.

Laws change. Relationships come together and move apart. The economy shifts. Kids disperse. Parents die. Grandchildren are born. Priorities shift. Interests change. Life is still pretty complicated, even without the family business.

What can I take away?

Change, even positive change is like finally cashing in on all those years of blood, sweat and tears, can be overwhelming. A family enterprise continuity strategy can help a family understand its current overall financial wealth and explore how its financial resources can be used in support of the family's human, intellectual and social well being.

Business Transition Services can help families figure out what's next by:

• Taking a deep dive into where things stand now, financially and for the family
• Helping articulate goals for the future
• Facilitating the development of a strategy and an action plan to get there