Here are two very important questions for all of you.
The first important question: “What would your family do tomorrow, if you unexpectedly died tomorrow?”
For most business families, there are only 3 responses:
- We don’t know. We don’t have anything in place.
- We have our Wills, Powers of Attorney and Personal Directives in place.
- We have created an Estate Plan.
If you are a family that has not prepared and signed your wills, powers of attorney and personal directive, please consult your lawyer and have these prepared at your very earliest opportunity.
At a most basic level, dying without a Will causes your family unnecessary hardships that could be avoided, or addressed, at a much lesser cost with a Will in place. If you are a business family, dying without a Will is a much bigger problem for your family as there will be (among other issues) no one that will have the ability to lead and manage the employees, the business, nor have the authority to sign paycheques or pay the rent for the business premises.
The anxieties of your employees will be overwhelming and your family will have no answers to address the employees’ repeated and ongoing concerns.
Therefore, if you are reading this column and don’t have Will (and likely 50% of you will be in this group), please make a gift to your family by putting a Will in place (and make a further gift to your adult children by offering to pay the costs of getting their Wills). While a “will kit” or a “holograph will” are better options than having no Will at all, neither will fully address the needs of a business family.
If you have a Will or an Estate Plan, congratulations on taking those thoughtful steps for your family!
The second important question: “Have you have ever shared your Will or Estate Plan with your family?”
According to Dr. Tom Deans, author of Every Family’s Business and Willing Wisdom (www.everyfamiliesbusiness.com), and the third generation owner of his family’s business, the majority of people that have Wills or Estate Plans have never shared their intentions with their families; with Canadians being far more likely to hold their ‘secret’ from their families than Americans.
The problem with not sharing your succession plans with your family is that the rest of your family have insufficient information to create their own plans, including their own succession plans.
From a business perspective, unless you, your spouse and your only son/daughter are all involved in the operation and management of the business on a day-to-day basis, and you intend on leaving everything to your spouse and son/daughter, there will never be another situation where your surviving family doesn’t become ambushed by your secret plan on your passing.
While you may think that sharing your Will with your family will be difficult and your Will reflects your intentions that no one else should have any input into regarding their inheritance of the wealth and business that you have worked hard to create, you might be equally surprised to learn that others in your position have found that by sharing their intentions with their families and by understanding each family member’s perspectives, that gift of sharing has resulted in their families:
- becoming more united;
- being able to overcome past experiences, grudges and sibling rivalries;
- identifying, establishing and living the values of the family;
- creating a focused succession plan for the business; and
- enjoying a number of other benefits derived from having open and honest communication amongst all of the members of their families.
While there are benefits to ‘sharing’ the contents of your Will and Estate Plan with your family, simply ‘telling’ your family how you are intending to allocate the ownership of your business through your Will, and preventing the rest of your family to share their thoughts, dreams and goals, is likely to have a less than desirable outcome.
It might even be divisive.
FAMILY ENTERPRISE ADVISORS™ assist business families with the development of plans and processes necessary to successfully transition their business to the next generation (including Wills, Powers of Attorney, Personal Directives and Estate Plans that fit their families),
FEAs are professionals that have been certified by the Family Enterprise Xchange to assist business families with those difficult conversations and who are uniquely positioned to work with the trusted advisors of business families to develop such plans and manage those discussions.
To find a FEA to work with your family, go to https://family-enterprise-xchange.com.
If you have a question or issue that you would like to read about in future columns, please feel free to email me at firstname.lastname@example.org.
Until next time,