Archive for May, 2008
Many small company owners think they are doing the right thing by planning for the “orderly transition” of ownership from one generation to the next. Often done on the advice of an estate planning attorney, the sole owner for a generation or more often outright gifts his shares to his children.
If you intend to leave the company without having any further rights, ceding total control to your children, then there may be little downside to this approach. But all too often that is not the owner’s true intent. Your goal may range from remaining fully in charge, to staying on as a paid consultant, to simply receiving the pension that you know you deserve. But, once you give up control – even if your children pay nothing for the shares – you cannot simply get them back.