"Gifting" Is Number One Destroyer Of Family Business Wealth
New Book offers Blueprint to Protect Money and Legacy According to the US Federal Reserve, 90% of all North American businesses are family owned.
Over the next 30 years, an unprecedented number of those 24 million family businesses, worth more than $10 trillion, will transfer to the next of kin when the owners retire or die.
But author and business legacy expert Thomas William Deans warns that much of that family business wealth will be destroyed by a failure to plan for this historic wealth event.
"If current patterns continue, only 30% of family businesses will pass ownership to the second generation and only 3% will pass control to the third generation," said Deans.
"Some will sell, but many of these family businesses will simply close their doors or go bankrupt.
" In his book Every Family's Business, Deans confirms, in a story-telling approach, that it is due to a lack of proper wealth creation and preservation planning.
"Simply 'gifting' businesses to the next generation is one of the biggest mistakes families can make," he said.
Deans, PhD and founder of Détente Financial Corp.
, was president of a large family business for almost a decade and grew up watching his father and grandfather run their family firms, which all together, sold for over $100 million.
Deans' book offers a candid, common sense method for family businesses to begin their own succession plan through the aid of 12 questions which may be the most emotionally complex and difficult questions for families to address.
"Silence is the great destroyer of wealth in a family business," he said.
"Once these questions are completed and re-visited, the business is poised for success -- the air is clear as to who, when, and how the business will be owned and operated.
" The book delves further to explore the issues around family dynamics and why so many family businesses let their wealth and their domestic relationships deteriorate.
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Over the next 30 years, an unprecedented number of those 24 million family businesses, worth more than $10 trillion, will transfer to the next of kin when the owners retire or die.
But author and business legacy expert Thomas William Deans warns that much of that family business wealth will be destroyed by a failure to plan for this historic wealth event.
"If current patterns continue, only 30% of family businesses will pass ownership to the second generation and only 3% will pass control to the third generation," said Deans.
"Some will sell, but many of these family businesses will simply close their doors or go bankrupt.
" In his book Every Family's Business, Deans confirms, in a story-telling approach, that it is due to a lack of proper wealth creation and preservation planning.
"Simply 'gifting' businesses to the next generation is one of the biggest mistakes families can make," he said.
Deans, PhD and founder of Détente Financial Corp.
, was president of a large family business for almost a decade and grew up watching his father and grandfather run their family firms, which all together, sold for over $100 million.
Deans' book offers a candid, common sense method for family businesses to begin their own succession plan through the aid of 12 questions which may be the most emotionally complex and difficult questions for families to address.
"Silence is the great destroyer of wealth in a family business," he said.
"Once these questions are completed and re-visited, the business is poised for success -- the air is clear as to who, when, and how the business will be owned and operated.
" The book delves further to explore the issues around family dynamics and why so many family businesses let their wealth and their domestic relationships deteriorate.
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