Successful Multi-Generational Family Insight – Family Business Succession Planning
Successful Multi-Generational Family Insight
When you take a look at the families that have been successful with transitioning the management of their business activities along with the skills to continue the activities of the family with a value system that rewards the efforts of the family, you will identify that the families work hard, at all levels, to develop a multi-generational team. Many organizations provide an approach and support to help a family develop their team. These organization generally focus their efforts on the development of the following skills and documents:
One of the more challenging parts of developing an effective team is having a cohesive and effective family. There is an effort to develop an understanding of the family history as well as developing a family culture that is acceptable to the multiple generations. The effort generally includes the development of a mission statements, shared value documents and a formal family team structure which builds the multigenerational teams and communication channels. There should be a formal channel to allow for annual family gatherings to promote family member well-being.
Governance and Management
An effective family has a system of governance to facilitate communication and expectations. They have governance agreements outlining how decisions are made and modified. The families have policies and conflict resolutions to allow for a smooth execution of any current or future succession plan. They discus and develop an understanding of the economics of their family unit and develop short and long term objectives with a focus on individual family member estate documents and major life events.
Estate and Trust Management
In the area of Estate and Trusts management, there is a focus of communication intentions through both written document and other media. There are educational programs to educate both the grantor and beneficiaries to gain an understanding of the benefit of transfers as well as providing the beneficiary some context for the transfers. They take time when selecting trustees and advisors while at the same time work to develop strong relationships between beneficiaries and their trustees. Of course there is a focus on the essential tax planning and estate planning with an experienced team including an attorney and certified public accountant.
Strong families mentor each other. They provide financial education and develop a financially literate team. They provide parenting support as well as support for entrepreneur opportunities created by family members. Finally there is an effective family support network. These families understand the need for philanthropy and work to establish that value within their team. They understand that with some thought and strategy the family can leave a lasting legacy for their causes and communities important to the family.
The key for every family is to consider the possibilities and be willing to work to identify and achieve the goals which are most important to their family. Focus on the most important issues and risks and one by one the structure is developed. One area that I like to look at is to ensure that the appropriate legal documents are in place to facilitate family business in the case that a key family member is unable to continue to be active in the business.
For more information contact Mark J Burger CPA at firstname.lastname@example.org