The problems founders face when an heir announces he/she refuses to reign are significant and extend far beyond the hassle of hunting for a replacement in a poor quality applicant pool. The real damage done in this circumstance comes from what happens after the founder aborts his retirement plans and attempts to change the mind of his/her child.
Succession of the family business can be a fairly difficult transition for just about everyone involved in Cincinnati or elsewhere. This can be especially true for the heir apparent. What happens when the heir pulls away or even outright rejects the business? Well, the transition gets tougher still.
If you are a family business owner, are you intending to keep the business in the family even as you step down from control? Have you considered the possibility of designating an heir who does not want the family business and do you have a “Plan B” to adjust your succession plans accordingly? The reasons why an heir may resist taking up the reins to the family business are many facetted, but that doesn’t necessarily mean they are making a final, informed decision. No, it may take time, talk, and some understanding, and there are lessons to be gleaned from a recent Forbes article on the subject titled “5 Ways Family Business Founders Can Change A "Made Up" Mind.”
Perhaps it’s best to think of it this way: when it comes to succession, your estate planning is simply no longer just about your wishes, your hopes, or your dreams. Even if they are selfless, everyone else has to do his or her own thinking and planning. This can take patience, time and understanding.
If you have any questions about any of the information contained in this blog, see my estate planning website or contact Cincinnati attorney David H. Lefton at 513-399-PLAN (7526) or by email at firstname.lastname@example.org.
Reference: Forbes (September 10, 2012) “5 Ways Family Business Founders Can Change A "Made Up" Mind”