Examples of our Work

Transitioning a Family Business: A Thoughtful Approach

 

Larry founded a food manufacturing business in 1987. After 35 years of dedication, he felt it was time to slow down. He and his wife (Gen 1) have four children (Gen 2) -three sons and one daughter. Three years ago, Larry appointed his eldest son as CEO, while his daughter (child #3) had already been serving as VP of marketing for many years. His other two children chose careers outside the family business.

 

Currently, Larry retains 52% ownership of the company, while the remaining 48% has been gradually shared with his children -each holding 12%. His long-term plan, developed over years of discussion with his wife, was to fully transition ownership to the next generation. His vision was for the two children working in the business to eventually hold 30% each, while the two not involved would each own 20%. This approach, in his view, ensured that the company remained in family hands while acknowledging contributions to the business.

 

On paper, it all seemed straightforward.

 

However, as we asked Larry a few key questions, it became clear that a well-thought-out plan was needed to ensure a smooth and harmonious transition. The goal was to strengthen family unity, not create division. We compiled a list of critical governance and operational issues to address:

 

Key Questions to Consider

• Decision-making authority: Who has the final say—management (the CEO), the board, or ownership?

• Voting structure:

  • Should votes be cast in proportion to equity?

  • Should board members each have an equal vote, regardless of ownership?

• Deadlock resolution: How will the family address a tie vote (e.g., if two children vote in favor and two vote against)?

• CEO oversight: What level of authority does the eldest son have as CEO? Can he make decisions unilaterally, or should there be checks and balances? What if other family members disagree with his choices?

• Future family participation: How will the company handle requests from other family members -whether from Gen 2 or Gen 3 -who may wish to join the business in the future?

• Estate planning: What is the long-term strategy for transitioning ownership from Gen 2 to Gen 3?

• Communication protocols: How will key decisions and company updates be shared with family stakeholders?

• Profit distributions: Who decides how and when profits are distributed?

 

Addressing these questions may seem overwhelming but leaving them unresolved creates uncertainty. What should be a valuable family asset—providing jobs, income, and long-term wealth—can easily become a source of conflict if expectations are not clearly defined.

 

Rather than simply asking Larry and his wife to draft a document outlining their wishes, we took a more collaborative approach. We spent time understanding their concerns, values, and vision for the company’s future. We also engaged each of their children to learn about their individual career goals, aspirations, and expectations—and how those aligned with the business.

 

How we addressed it

Rather than simply asking Larry and his wife to address these issues and construct a document memorializing their wishes so that a contract could be generated.  We, instead, spent time with Larry and his wife understanding their wishes and concerns with transitioning the business to the next generation and beyond.  We also spent time with each of their kids to understand their career goals, aspirations, and expectations and how those aligned with the company.  We shared the list of concerns around the governance of the company in future generations and encouraged them to participate in resolving them. 

 

After going through this process, all 4 kids, Larry and his wife are pleased with the outcome.  Not everyone got exactly what they originally envisioned, they all agree that the outcome is fair, practical, and designed for success. Most importantly, they are committed to each other, the family business, and seeing it all thrive.   

Family Vacation Home: A Legacy or a Liability?

 

For over 20 years, this family has cherished a home just outside of Park City, UT. Generation 1 (Gen 1) originally purchased the house as a place to create lasting memories -skiing, celebrating holidays, and gathering for birthdays with their four children (Gen 2). Over time, the home became the heart of the family, hosting countless special moments across generations.

 

Recognizing the home’s deep sentimental and financial value, through their estate planning: Gen 1 gifted the property to their four children (Gen 2), each receiving an equal 25% ownership stake. The house was professionally appraised, and appropriate lack-of-control discounts were applied since no single owner holds a majority share.

 

Gen 1 saw this transition as a beautiful gift -a way to ensure the home remained a family gathering place for years to come. But reality is often more complicated. While the intention was to preserve unity, without proper planning, a multi-million-dollar asset shared by multiple families can easily become a source of division rather than togetherness.

 

Navigating Shared Ownership: Key Challenges

Transferring ownership from one decision-maker (Gen 1) to four couples (Gen 2) introduced complexities that required thoughtful discussion and planning. Some of the key questions included:

• Usage & Scheduling: How will access to the home be managed? Who coordinates the calendar?

• Rules of Use: Can Gen 3 (the grandchildren) use the home independently? What about friends without a family member present?

• Property Management: Who oversees maintenance, cleaning, and general upkeep? How are vendors selected?

• Repairs & Improvements: How are major upgrades decided? Who manages renovations? What happens if opinions differ on style or necessity?

• Financial Considerations: Will the home be rented out for income? If so, who manages it?

• Exit Strategies: What happens if one owner (Gen 2) wants to sell their share?

 

Creating a Framework for Success

When Gen 1 owned the house, there was no gray as they owned 100% and made all the decisions. Upon transferring to Gen 2, expectations and decision making became more complex.

 

However, understanding that clarity prevents conflict, we facilitated open discussions among Gen 1 and Gen 2 and structured a “Rules of Engagement” agreement to govern the property’s future. With this in place, the extended family has been enjoying the home without conflicts creating division. 

Vinny placed great importance on education within his family. He wanted to ensure that his grandchildren had the opportunity to earn a college degree, believing it would provide them with the foundation for a successful career. With the financial means to support their education, he assured his children that he would cover the cost of college for his grandchildren.

 

One of his grandchildren, however, had always been passionate about airplanes and aspired to become a pilot. Rather than pursuing a traditional four-year university degree, he wanted to enroll directly in flight school.

 

His parents fully supported this decision. They had watched his lifelong fascination with aviation and admired his determination to turn his passion into a career. Knowing that flight school would provide him with specialized training and strong job prospects, they embraced his choice. However, when they shared the news with Vinny and requested financial support for flight school, they were caught off guard by his response.

 

Vinny had always envisioned his grandchildren attending a traditional college. When he committed to funding their education, he had not considered the possibility of an alternative path—one that skipped college in favor of a specialized or trade school, even if it led to a stable and rewarding career.

 

In our work with clients, we help them clarify their intentions and communicate them effectively to their families and beneficiaries. While Vinny may not have anticipated this scenario, another family might view a direct path to a specialized school as entirely acceptable. (What if a grandchild wanted to study art in France or culinary arts in Italy?)