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3 tips for passing a business to your children

Many business owners plan to leave the company to their children. They see the business as a legacy. They want their children to run the company and keep it in the family, both providing them a source of income and helping to build on that legacy.

But business succession planning can be complex. It’s best for business owners to do this well in advance so that everything goes smoothly. If you’re in this situation, here are three tips that can help.

Get started early

Do not put off the business transfer until the last minute. Your adult children need to learn how to run the business and develop the skills and abilities that you already have. According to some experts, it can take from 5 to 10 years to get to this point. It’s not something you do a few months before you want to give the business to one of your children.

Anticipate conflicts

Conflicts between siblings, especially if they’re co-owners, could be highly detrimental to the business. If you can anticipate some of them, you may be able to take steps to avoid them, such as giving children very specific roles. You can also address dispute resolution tactics that can be put into place in advance.

Remember that it doesn’t have to be equal

Some people believe that they need to leave their business equally to all of their adult children. You can if you want, but don’t assume that you have to. You could certainly choose one beneficiary to put in charge of the company, while giving your other children lesser roles. You could also choose to leave the business to that beneficiary alone, while giving other assets to the other children.

When making an estate plan and a business succession plan, take the time to carefully consider your legal options.