The most common way to pass a business on to your heirs is to leave it to all of them. This is what most business owners plan to do. A large part of the reason is just that it feels fair and doing so can avoid estate disputes.
However, there are some serious downsides. You need to think about this carefully. Remember that you do not have to leave the business to all of your children. You are fully within your rights to include or exclude as many as you want.
What could go wrong?
Exactly what may go wrong if you split the business evenly depends on your unique family dynamics. However, here are a few things to consider:
- Your children may not be able to agree or work together. This can lead to disputes and arguments, rather than leadership.
- Some of your heirs may not have the skills needed to run a business, while others will. This can lead to mistakes and to resentment between owners.
- Some heirs may have no desire to be part of your business. They would rather get other assets and let their siblings control the company.
- Having a group of people in control, rather than just one person, may make decisions take far longer than they need to, making the company less efficient.
You do want to make the best decisions for your family, but remember that you also need to make the best decisions for your business. They may not always be the same. Take the time to carefully consider your legal options and find a solution that is actually going to work on all levels.