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All too often, poor family communication stands in the way of successful business wealth transfers. When wealth transfer advice is fragmented in terms of financial, legal and tax concerns, the tragic results are misinformation, mistrust and failure to meet the objectives of all involved. In many cases, family wealth transfer planning is treated as a private matter concerning only the senior generation. Often, there’s a feeling that “it is our money, to do with as we please.” The desire to avoid family disputes over how the wealth will be divided is also sometime a factor. But, when a significant portion of the family’s wealth lies in a family-owned business, planning in secret has serious potential for harm.

In planning for the disposition of a family business, the desire to treat all family members ‘fairly” is often a deciding factor. In many cases, that means leaving equal shares of the business to each heir. This arrangement pits the interests of the family members involved in the business against those of the non-active owners. Owners who do not involve all affected family members in planning decisions frequently have difficulty discerning who has the skills, talent’s and interest to run the business. Also, who would prefer to inherit non-business assets, if there are any.

When working with family business owners, advisors need to begin by reviewing the current business succession plan and interviewing each family member and trusted advisor. The information obtained during the individual meetings is used in the development of a new wealth transfer plan for the family Another key component of the wealth transfer planning process used is the family retreat, where the new plan is presented to the entire family for discussion and approval.

Planning for the family retreat involves consideration of a number of important factors:

Find a neutral location:

The family retreat should be held in a comfortable setting not associated with the family business. A hotel or resort setting is appropriate. The event should take place in a room large enough to accommodate everyone comfortably. The location should be one that helps people relax and isolates everyone from the daily stresses of life and business. If the family has a favorite spot for fun and relaxation, use that as the retreat site. Privacy is an important factor, so the meeting room should be private.

Create an atmosphere of open sharing:

It is important to begin the meeting with a review of the current plan, taking time to establish a positive environment conductive to effective family dialogue. Trained Wealth Transfer Specialist (WTS) encourage gathered family members to express their true feelings regarding the importance of honest, open communication and the need for give-and-take.

Speak from the heart about the value placed on planning for the future of the family and the business. Everyone is reminded that the goal is to implement a plan that is in the long-term best interest of the business and the individual family members. All input regarding the current plan and the new planning process is legitimate, but judgments about individuals or personal attacks are off-limits.

Stick with the agenda:

The family retreat is not a free-for-all. It is structured to guide the family through a process of communicating individual needs to each other in an open and honest manner and coming to agreement on the details of the new wealth transfer plan. The WTS begins by asking each individual to respond to a series of three questions.

  • What are your expectations for the retreat?
  • What do you admire most about your family and the family business?
  • What changes would you like to see?

The first question is non-threatening and designed to help everyone become comfortable speaking in front of the group. Every response is valid. All answers are recorded on a flipchart that is posted on the walls of the room for all to see. One of the objectives is to make certain that by the time the retreat ends, everyone in the room agrees that his or her initial expectations were considered and met when possible.

The second question, also duly recorded and posted, helps set a positive tone for the meeting. All participants are invited to talk about the family and business history and describe in their own words what they see as the benefits of membership in the family.

In most cases, this is the first time the family has ever taken the time to reflect on the good that comes from being a business-owning family.  The entrepreneur often becomes emotional during the process, as he/she has probably never heard their children and grandchildren express appreciation for their lifetime of struggle and sacrifice.  This discussion also reminds everyone in the family that they are indeed fortunate to have a business as a family resource.

The third question gets to the heart of the reason for the retreat. Everyone knows that a new plan is about to be unveiled and may be anxious about the details. An overriding concern is, “How do I fit into the new plan?” The responses to the third question help everyone in the room understand how each family member views the business and his or her potential role in it. Rarely is the WTS surprised by the responses to this question because the WTS had taken time at the beginning of the planning process to meet each family member individually. The WTS knows what to expect from these responses. The plan incorporates what was learned from the individual meetings.

The three questions and responses set the stage for the presentation of the new wealth transfer plan. The objective now is to give everyone the opportunity to explore concerns about the new plan through constructive dialogue.

Review the current plan:

After completing the three-question exercise, review the current plan for the transfer of family wealth, if one exists. If there is no formal plan, review the state of intestacy laws as they apply.

The goal is to have all family members understand what would have happened to the business and other family wealth under the existing arrangement had the current owner died. This exercise underscores the need for a new plan.

Relate family objectives to the new plan:

After reviewing the family goals as they were spelled out in the three question exercise and the initial family interviews, describe how the family’s overall goals influenced the design of the new plan. For example, if one child in the family indicated a desire to pursue a career in the family business and a sibling expressed a wish to do something entirely unrelated to the business, the description of the new plan will focus on how this will be accomplished while treating both children fairly.

Once the family members understand the “big picture,” ask for general agreement on the new plan design. Explain the concepts involved and respond to any questions or concerns. We have found in our experience with family businesses that having an objective adviser facilitate the process and encourage expression of all points of view leads to acceptance of the plan by all family members. From the beginning, the goal is to engage the entire family and seek the viewpoint of each family member. This process helps everyone understand that even if the new plan does not give all family members exactly what they had hoped for, it is an opportunity for everyone to understand how and why the new wealth transfer plan was designed. The owner was provided with input from all family members and was now able to make informed decisions, resulting in a much greater chance of family agreement. At the end of this process everyone will be satisfied that the new plan makes sense and is the best direction for the future.


Once there is agreement, describe in more detail how the new plan is to be implemented. This explanation includes discussion of the legal documents needed, possible need for change of business structure, liquidity needs, and actions required by various advisers and family members. Potential problems that might be encountered along the way – such as the costs associated with implementation, potential insurability issues, training and development of new leadership and assurance of continued business bank loans after the current owner’s departure – are also reviewed. Here again, family members know of the plans implementation and the owner makes the final decision.


The completion of the family retreat and agreement to implement the new plan is cause for celebration! This should be a really special event in recognition of all the time and effort devoted to the entire planning process. Developing a plan that satisfies all family members and assures continued success of the family business is no small accomplishment.

The WTS encourages the family to plan for periodic family celebrations to keep everyone up to date on the progress of plan and to discuss possible updating. In any case, periodic events like this would be a great way to keep the family communication lines open. One of the principal goals is to enhance family relationships, and planned events like these are excellent opportunities and result in enhancing business possibilities.

Including all the family members in the initial interviewing process and presenting the new plan at a family retreat are major refinements to the usual business-owner-oriented planning process. Together, these two elements add a dynamic that no other planning approach can provide. The experience of openly sharing hopes, dreams and concerns about the family business can be cathartic in many cases. Think of it. Instead of secrecy and disharmony, the family enjoys open, honest communication and enhanced family relationships. Instead of suspicion and jealousy, there is respect for each other. Instead of competition between family members, there is a sense of cooperation. Family and business life in balance at last!

Additional Benefits:

It is clear how the business and the family benefit from this process. However, it is also valuable to the organization that takes the time to learn and implement the process whether they are tax, legal, bank, or financial consultants. By assisting business wealth transfer planning advisors may experience:

  • Enhanced client relationships
  • Assurance family business will survive business succession
  • The need for additional services such as:
  • Corporate trust services
  • Commercial loans
  • Increase revenue:
  • Fee for service
  • Life insurance sales
  • Differentiation
  • Stand apart from the competition

karlKarl Bareither is a wealth transfer specialist and independent financial adviser. He is president and founder of FBR System that now trains advisors to become WTS. Karl and his wife Lillian live in Avila Beach, California.

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