The Family Business and Estate Planning: When Equality Can Destroy the Family

What if the estate plan that looks fairest on paper can be the plan most likely to create family conflict? If you have three children, giving each child one-third may seem like the obvious answer. That can work when everything is cash or another asset that can be divided easily. It becomes much harder when the family owns a business, farm, beach house, mountain cabin, or other property that requires ongoing decisions and shared responsibility. In this episode, I explain how to think through those difficult choices. I use the public dispute involving the Buss family and the Los Angeles Lakers as an example, along with a composite family-business story about Margaret and her three children. We’ll look at three important questions: Who gets to decide? Who gets to benefit? When does the arrangement end? I’ll also discuss ways to keep a business in the family, sell it, or allow one child to take over while the others receive their share. When everything is easy to divide, equal shares may be a reasonable plan. A family business or shared property is different because ownership also brings responsibilities, expenses, and decisions. Equal shares can create unequal burdens, and equal authority can create deadlock and drama in the family. Who gets to decide, who gets to benefit, and when does it end? Those are the three questions I want families to ask. Who gets to decide? Who gets to benefit? When does the arrangement end? Parents often answer the second question right away by saying that every child should benefit equally. The more difficult questions involve control and time. Who can hire and fire employees? Who decides how much money stays in the company? Who approves major investments or distributions? The plan also needs to recognize that adult children have their own lives and may not want to remain tied together forever. Hope is not a plan. I encourage families to plan for the children they have today, not for the people they hope those children will become. Equal benefits may still be right, but equal control could place the children in a situation that makes existing tension much worse. Episode timestamps 00:00 Equality, shared property, and family conflict 01:10 The Buss family and Lakers ownership dispute 02:06 Separating decision-making from benefits when planning for framily business succession 03:43 The Morgan family landscaping business example 05:18 Why equal control may not fit the business 07:54 “Hope is not a plan” 10:07 The three questions every family should ask when planning for the famiy business 14:55 The family farm that the children did not want to keep 17:09 Seeing property as a financial resource 18:11 Ways to manage or divide a family business 20:21 Keeping ownership within the family 21:54 Planning realistically and talking with your children Reserve Your Spot at Our Next Estate Planning Law Group of Georgia Workshop  https://letstalkestateplanning.com/es... Visit our website to learn more  https://letstalkestateplanning.com/  Call Us (770) 822-2723 Watch the Podcast on YouTube     / @estateplanninglawgroupofge137    Meet Jim Miskell Jim Miskell is the principal attorney and founder of the Estate Planning Law Group of Georgia, James M. Miskell, PC, and practices exclusively in the areas of Elder Law, Estate Planning, and Probate. Jim began his law career more than 30 years ago as an Assistant District Attorney, specializing in prosecuting crimes against children and special victims. For the past decade, Jim has been in private practice as The Estate Planning Law Group of Georgia, James M. Miskell, P.C. and now specializes in wills, trusts, estate planning, and elder law, helping families plan for all stages of their lives. No two families are the same and no two estate plans are the same.  Jim believes that estate planning is most effective when you understand all of your options before making any major decisions. To that end, the Estate Planning Law Group of Georgia, James M. Miskell, PC, offers free educational workshops so that clients discover potential issues and options for their families. Then, in consultation, families can make informed decisions in planning for the future.   Disclaimer The information provided in this podcast is for general informational and educational purposes only. It is not legal advice. If you need advice about your specific situation, please consult a qualified attorney licensed to practice in your state and experienced in the relevant area of law.