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Not having a succession plan can pit children against one another

When you create a succession plan for your business, you are doing more than just focusing on the future of your company. You are also working to create the best possible future for your family. With no plan in place, you may inadvertently pit your children against one another.

This is exactly what happened when one man's mother passed away after building up a successful food-based corporation. The man and his mother worked together to start the business while she was alive.

For reasons the man will never know, his mother neglected to make any succession plan. The children had no idea who she wanted to run the company. They all controlled a portion of it, and they began fighting over leadership positions.

Things got so bad that the man, a founding partner, decided to just donate his shares. He gave them to a charity and washed his hands of the whole thing. He left his siblings to argue with one another over the remaining shares, but he wanted nothing to do with it. He said they eventually ended up selling the company entirely, long after he was out of the picture.

It was clear that the company, rather than providing a source of income and giving the family members comfortable lives, turned into a wedge that was driven between siblings after their mother's death. Had she known the outcome, she likely would have put a bit more time into planning in advance.

The good news is that you can learn from this cautionary tale. Make sure you know all of your options when passing a company down to your children.

Source: The Week, "6 tips for navigating the estate-planning talk," Sheryl Nance-Nash, accessed April 25, 2018

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