To give or to take

Our life does not always go as we plan it. When a wrench is thrown in our plan, we find ourselves in a big dilemma. This is exactly what a second generation CEO of a family conglomerate felt when one day his father, the President of the group of companies, announced that he was retiring. After more than five decades of building, expanding and turning the family business into a very successful shipbuilding company, the President had finally decided that it was time to rest and leave the business to his CEO son. He wanted to divide all of his assets, properties, stakes or basically all of his wealth equally between his three sons—the CEO, a doctor and a missionary.

The CEO has always been involved with the company. His brothers do not want anything to do with it. The news of dividing the father’s stake worries the CEO. He knows that his brothers may resort to selling their stakes and this could greatly affect his family’s rights to the conglomerate.

In the same week, the CEO’s 28-year-old daughter asks him for her inheritance. Sounds absurd? Her explanation is that for all of her life her father has encouraged her to break barriers and do everything she can to succeed. She has a very entrepreneurial mindset and has actually started a couple of ventures with either former classmates or friends. Unfortunately, none of the businesses have panned out. She blames her failed ventures on a lack of adequate funding. Her father thinks it’s her lack of experience that has sunk her businesses.

A week ago, the CEO was busy running a successful conglomerate. His plan was to lead the company for a couple more decades, retire and pass on the company to his daughter assuming that she would be ready by then. Now he is facing a dilemma of taking an inheritance that he knows might result in a decreased ownership as well as weakened rights to the company and giving a portion of it in response to his daughter‘s request to hand over her inheritance.

The CEO was caught off-guard with the inheritance offer and inheritance request. Aster Family Advisors advocates for every business family to have a succession plan early. This way, families can implement a transition strategy long before the actual transition happens. The transition is smoother when families have a longer preparation period.

We help families draw a viable succession plan. Besides preparing families for the inevitable transition once the head of the family steps down, it also prepares the next generation for their future role in the family business. Families are always surprised at the powerful insights they get from a succession plan. It can even show paths that families can take within their respective predicaments.