The two owners of a manufacturing company sought a succession plan that would maintain family ownership and involve their four grown children, none of whom had previously been employed by the business.
To minimize dissent, the owners chose to groom a non-family member as the company’s new leader. The children were included in the selection process to increase their investment in the leadership decision. To educate the children in the business, the owners voted them to staggered terms on the board, which also included knowledgeable outside directors who could counsel the children if needed. Additionally, the owners developed estate plans that would transfer the business to their children without creating an estate tax that would necessitate sale of the business.