How to deal with family members by marriage poses significant challenges to wealthy families. Should they be allowed to work in the family business? If so, should there be a ceiling on their authority (stock, voting rights, etc)? Do they have a seat/voice at family meetings? What if the only person in the rising generation with the skills to be involved in the family business is a child-in-law? What to do when a marriage is on the rocks (and the child-in-law has a role)?
There are no clean-cut answers to these questions and not even best practice, because each family is different. It comes down to a few general guiding principles, together with the family’s own culture and beliefs regarding the role of children-in-law (some families have blood line rules that have existed for generations and challenging them is near impossible).
Here are some of my favourite aphorisms:
- You enter a family by birth or marriage, and leave by death or divorce (and divorce is not as final as death).
- If a child-in-law doesn’t have an actual voice at the table, their partner may be their proxy voice.
- Don’t hire whom you can’t fire (applies to any business, and any person)
- What works or doesn’t work in another family is no guide to what will work or not work in your family.
Rather than be reactive, develop and articulate your own family’s guiding principles and then setup governance to ensure they are applied as equally and fairly as possible.
Consider This: Does your family have a culture regarding how in-law children are treated? Have you ever had to fire a family member? How do you deal with pillow talk about family business/wealth? Do you have any (formal or informal) induction process for in-laws?
Original articles: https://www.forbes.com/sites/francoisbotha/2019/11/30/when-families-welcome-new-family-members–cultures-what-to-consider/#766fa5ca3f1e, https://www.jdsupra.com/legalnews/family-matters-can-a-family-business-78318/?, https://www.chroniclelive.co.uk/special-features/look-family-businesses-divorce-17022880, https://www.heraldtribune.com/business/20191028/nepotism-is-keeping-it-all-in-family
Actionable Generational Wealth Succession
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