A new study shows that the majority of families with a business don’t have a successor in place and that many parents are not even confident about whether they want the children to take over the company in the future. Failing to set up a conversation to consider these concerns can be devastating for a company. 
According to the research, only 27 percent of family-owned businesses had a succession plan in place with regard to senior management positions. What’s most disconcerting about these findings is that two-thirds of the surveyed owners were over the age of 50. Only half of those who completed the survey were thinking about passing the business on to the next generation in their family.
What this indicates is that many people are questioning their next move, but waiting too long to have the conversation with relevant stakeholders. Although people are living longer these days, planning should be done well in advance of possible healthcare issues or a voluntary exit from the business. The conversation involving children and their interest and ability to participate in running the business should happen as soon as possible. Waiting too long leaves the door open for a critical event like a disability or death to raise a lot of questions very quickly.
You don’t have to arrive at a final answer right away, but it’s valuable to think about the future even if you’re not sure whether children will be taking over. Contact an estate planning expert to help you initiate this conversation today. Send us a message to learn more about planning for your family business at info@lawesq.net.