Business Transfer Planning
Building a successful business is a difficult achievement. All of your hard work could evaporate upon your death if there is no plan in place to make sure the business can continue as a viable entity. It may stay in the family or it may be sold. Some studies report that as few as 30 percent of family-owned businesses are carried on by a second generation. Those statistics fall to 12 percent for a third and only 3 percent for a fourth generation or beyond. Often, subsequent generations are not as vested emotionally and choose to sell. You probably are not going to have access to three or four generations beyond you to plumb the depths of their interest, but you should be able to have meaningful discussions with your immediate offspring — if they are of age to make adult decisions.
It is in everyone's best interest for you to seek sound legal and tax guidance on the best way to make a transfer. You may even want to transfer the business before your death. In either case, you will want to take care of any family members who choose not to participate in the business — perhaps using life insurance policies to balance things out financially.
It may be the case that no one in your family has the interest or talents to assume leadership of your chemical engineering firm. You certainly still want your heirs to gain from your success whether or not they go into the family firm. One excellent way to protect them is to execute a buy/sell agreement with a worthy competitor. This gives another solid player in your field right of first refusal to buy your company after your death. By taking this action, you protect your heirs from getting caught up in emotions, perhaps thinking the business is worth a ridiculously inflated sum. Conversely, it protects them from unscrupulous vultures looking to grab a valuable asset for a fire-sale price.