Family business disputes can be burdensome, costly and nasty. If your business is involved in a serious internal conflict, you’ll want to talk to us here at Springer & Lyle. Here are a few suggestions for when your family is involved with your business.
Everybody Pulls Their Own Weight
Any family member on your payroll must contribute to the operation of the business. Every family member should have a detailed job description. His or her duties and responsibilities should be clearly defined. Any family member who isn’t diligently pitching in slows down the entire business operation.
When the Next Generation Comes In
Some employees might have been working for the company for longer than a second generation family member who is coming into the business has been alive. Management and personality differences can easily evolve into disputes, especially if an ownership interest is passed on to that son or daughter who has little or no experience in the operation of the company.
The Success of Husband and Wife
A couple sharing wedded bliss might start a company from scratch and make it enormously successful, but problems might arise in the marriage and cause a divorce. It’s quite complicated when two people who want a divorce don’t want to work with each other anymore either. Maybe two siblings won’t want to work with each other, but two others want one to stay and one to go or both to go. Any one of these scenarios can bring a family run business to an abrupt halt.
Some people are so involved with their business that they don’t plan on what will happen to it upon their death. If you want your business to survive, somebody has to take over its management. The next issue is who will actually inherit your business. Lastly, Uncle Sam might want to be paid if you fall into the inheritance tax bracket. For purposes of the continuity of your family business, you’ll want a seamless estate plan. Neither you, your family nor your employees want to see prolonged probate proceedings affect their livelihood and families too.
Many family business disputes end up in litigation, but there are alternatives. If you would like to avoid these issues, talk to us about a buy/sell agreement or a shareholders agreement for your business. If you think that you see potential family business litigation on the horizon, contact us at Springer & Lyle. We’re successful business litigators and experienced estate planning attorneys. We’ll give you straight talk and straight answers.