How Transition Ready Is Your Family
In the early days of my billing business, a prospective customer asked me: “what if I was hit by a bus?” This highlighted to me the dependence of the business on me, and I set about making the business “sale-ready”. That didn’t mean that I planned to sell it, rather that if I ever wanted to, I could, because the business would be worth as much without me as with me. That is my definition of a true asset.
People have been talking about “the great wealth transition” for a long time, and for various reasons, these transitions are taking longer than expected. But not matter when the transition will actually happen, it is in the interests of a family to become “transition ready”. That means (a) the incumbent generation have clarity about what life looks like for them if and when they choose to retire, (b) the rising generation are ready, willing and able to step into positions of control within the family enterprise, and (c) the operating and non-operating assets of the family are well-governed and managed, and therefore the family has optionality regarding their future disposition.
Being “transition ready” is a lot more than having a will and an estate plan with a lawyer. It needs communication across the family, and shared vision for the future. Thinking and talking about our mortality and plans for the future can be very confronting. Not talking about it leads to fragile family systems that can easily fall into conflict.
Consider This: How “transition-ready” is your family? How might you measure that readiness for yourself, your children, and your assets?
- 5 Steps For Starting A Legacy Conversation With Your Family
- Failed Succession Plans & the 8 Lessons They Teach
- 5 Questions You Should Be Asking About Succession Planning for Your Family Office
- Preparing for what’s next after the sale of your business
- Creating Momentum In Your Succession Planning Process
- Family businesses in Malaysia lack succession planning
Here is more on reading on wealth transition.