Can I Force My Family Member to Run My Business After I’m Gone?

If you have spent most of your life building a successful business from the ground up, you might want a family member to “take the reins” after you’re gone. But what if your family member shows little interest in running the business? Is there any way to force your loved one to take on this responsibility? This is a conversation you might want to have with an experienced estate planning lawyer in Palm Beach County.

You Cannot Force Your Family Member to Do Anything

Although there are many business succession strategies to choose from, none can force your family member to do something against their will. While you are still alive, you cannot force anyone to run your business without their consent. These basic rules also apply after your death, and no estate planning strategy can overrule someone’s ability to consent.

You Can Create Conditions That Strongly Encourage Your Loved One to Run the Business

That being said, you can structure your estate plan in a way that strongly encourages your family member to run the business. One example is a conditional bequest in a Will. You might leave your loved one millions of dollars, but only if they agree in writing to spend a certain number of years running your business.

You can also create these incentives with trusts. For example, a trust might guarantee your family member access to asset distributions every month or year. You can instruct your trustee to stop making these distributions if your loved one ever decides to stop running the family business. You can even create complex performance-based incentives through the trust. If your family member helps the company succeed, they may receive higher rewards from the trust in the form of asset distributions.

An estate plan of this nature may also involve penalties for refusing to run the business. For example, your loved one might receive no inheritance whatsoever if they refuse to take on this leadership position. This “carrot and stick” approach may give your family member no choice but to accept, even if the estate plan does not actively “force” them to do anything.

Consider Alternative Options

If your family member has expressed disinterest in running the family business, they may not be the best choice. Although an estate plan can strongly incentivize your family member to accept this responsibility, it may make more sense to choose a more motivated business leader. Your family member can still benefit from the company’s success, especially if you leave them ownership shares.

Can a Palm Beach County Estate Planning Lawyer Help Me?

A Palm Beach County estate planning lawyer may be able to help if you have specific plans for your family business. While business succession planning is a key priority for many entrepreneurs, a family member isn’t always the best choice to take the reins, especially if they are not interested in this responsibility. Discuss your unique circumstances in more detail with Kitroser Lewis & Mighdoll by calling 561-721-0600 today.

Source: 

flceo.org/succession