I have had very few clients involved in family businesses, which businesses have succeeded to the second generation.  Some of my clients have been children who have been “frozen out” of the business by their siblings, sometimes to the dismay of the founder.  Sometimes the second generation hasn’t a clue to how the business is run.

The owners of a successful business should begin at least 10 years before they plan to turn over the reins, to implement a realistic plan for succession.  By realistic I do not mean including, in future management, the child still in kindergarten or believing, that the child who is successful educator, will suddenly see the light, and join the business.  It may be that the best course is sale of the business, insuring a safe retirement and perhaps a cash gift to the second generation.

There are some interesting stories at Lifting the Second-Generation Curse.  You can find a link to that article which appeared in The New York Times at my Twitter account @EdPolubinski