Some of the most complex and challenging estate settlements involve a family business.
Fewer than one-third of family businesses survive into the second generation, while only 13 percent make it to the third generation. A host of common challenges can threaten the survival of a family business, including unplanned retirement, disability, death, succession, taxes, mismanagement by heirs, disagreements among heirs, forced sales, and unanticipated market conditions.
The best way to protect a business is with a comprehensive estate plan that is thoroughly discussed with impacted family members and drafted with the help of an experienced estate-planning attorney. Among the common asset-management tools that can help a business survive well into the next generation and beyond:
There are many additional considerations involved in settling estates that include a family business. Consulting a Cleveland probate attorney with significant experience handling business and real estate law is best done as early as possible.
Unfortunately, far too many people believe consulting professional legal help at the start of the estate settlement process will only exacerbate contention and raise the emotional temperature. That is usually not the case. In fact, an experienced probate law firm can take much of the emotion out of the situation. We can often deal professionally with family members in ways that other family members cannot, ultimately making for a smoother transition and preserving your relationship with loved ones. After all, getting through the estate process with a family business intact, only to be forced to run it with family members after relationships have been severely damaged, is not a recipe for success.
Primary challenges to settling estates involving a family business include:
The forced sale of a business is a leading destroyer of wealth. Those who are forced to liquidate never find all of the market conditions running in their favor. Conversely, attempting to limp into the future by running a business where no one (or everyone) is in charge can be just as damaging to long-term value.
Our experienced estate-planning attorneys in Cleveland cannot stress enough the value of proper estate planning. Trusts, in particular, can be a wonderful way to protect a business while guiding it well into the next generation. But even without proper planning, early consultation with an experienced probate law firm can offer many tools and resources that can protect a business, maximize value, and significantly improve the chances of completing the process with a workable plan, without ruining your relationship with family members.
Daniel McGowan is a member of the Association of Professional Responsibility Lawyers, and an active member of the Estate Planning Council of Cleveland and the Real Property, Probate, and Trust Law Section of the Florida Bar; the Elder Law Section of the Florida Bar, the Real Property, Trust and Probate Law Section of the American Bar Association; the Estate Planning, Trust and Probate Law Section of the Ohio State Bar Association; the Estate Planning, Trust and Probate Law Section of the Cleveland Metropolitan Bar Association and the Lawyers Guild of the Catholic Diocese of Cleveland and the Elder Law and Special Needs Section of the Ohio State Bar Association.
Attorney McGowan represents clients in probate and estate matters throughout the Cleveland area, including Lakewood, Rocky River, Fairview Park, Shaker Heights, Cleveland Heights, South Euclid, East Cleveland, Linndale, Brooklyn, Parma, Brook Park. Newburgh Heights, Cuyahoga Heights, Brooklyn Heights, Warrensville Heights, Maple Heights, Garfield Heights, Bratenahl and Euclid.
Call 216-242-6054 today for a free and confidential consultation.