Justice Among Children
I feel like I’ve hit a brick wall over how to divide my estate among my adult children. I am torn as to how to look at the issue; as a father or as a chairman:
We empathize with this parent’s dilemma; it is both normal and predictable.
Research shows that over time, family-owned businesses outperform their non-family counterparts. Not transferring stock to family outside the business may have its benefits. An inactive, non-owning sibling may find the distribution unfair as he watches the business’s profits and – by association, perceived or real – wealth of the active, owning sibling going ballistic.
Over time, when children are educated about and given an opportunity to appreciate the responsibilities of ownership (see “Family Business Ownership: How to be an Effective Shareholder,” Book #15 in the Family Business Leadership Series), you may find you’re able to collaborate with your children and arrive at a mutually agreed-upon way to distribute your assets to the next generation. The junior (now adult) generation’s participation in the decision-making process removes much of the burden of this divisive decision from your shoulders. And by involving kids in a decision they’ll ultimately have to live with, they’ll feel that the decision they themselves made was just and fair. The goal is to leave the children something beyond your wealth.
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