How to talk about succession in a family business
To talk about succession in a family business, it helps to separate three conversations that almost always get tangled: whether and when the founder wants to step back, what each member of the family actually wants, and how the handover is structured legally and for tax. The third is a matter for the notary or solicitor, the corporate lawyer and the tax adviser, who can begin their work before the other two are settled. The first two are opened by whoever dares first, founder or heir, with a question that carries no deadline and expects no answer the same day. Silence is a decision too: it leaves the handover to the law and to circumstance.
In brief
- Succession is put off because each side waits for the other: the founder fears that talking about it means announcing a departure, the children fear looking grasping, and senior managers feel they have no standing to ask.
- Silence has a concrete cost: without a will or forward planning, the law and the company’s articles decide, and the business is exposed on the day the founder can no longer sign.
- Wills, articles of association, powers of attorney, family charters and tax are matters for the notary, the lawyer and the tax adviser, who should be involved before anyone else.
- Stepping away from a life’s work is also a personal matter, and children are entitled not to want the business, or to want it on different terms.
- The conversation opens more easily with a question than with a proposal, somewhere quiet, and without asking for an answer the same day.
In this article
- Why does no one talk about succession in a family business?
- What silence decides for you
- When the children do not want the business, or dare not ask for it
- What do the notary, lawyer and tax adviser handle?
- Letting go of what you have built
- What can you prepare before the first conversation?
- How do you start a conversation about succession?
- Frequently asked questions
Why does no one talk about succession in a family business?
The scene is familiar in many business families. The founder is in their seventies, still first into the office and still signing everything that matters. The children are adults; one works in the business, another has built a life elsewhere. Senior managers who have been there for decades know how everything works and have no idea what will become of any of it. Everyone thinks about succession. Nobody names it.
For the founder, raising the subject means admitting that one day someone else will be in charge, and perhaps that the day is closer than they would like. They feel fit, and often they are. They also hold a conviction that is hard to argue with: nobody knows the business as they do. As long as that remains true, any handover looks premature, year after year.
For the children, the question carries a different price. Whoever raises succession risks appearing pushy, calculating or, worse, like someone thinking about a parent’s death. The child who works in the business fears it will sound like a claim; the one outside, like interference. And the child who does not want the business keeps quiet for another reason: saying so would mean disappointing the person who built it.
Senior managers are in the most awkward position. They know the figures, the customers and the weak spots, and they often see more clearly than the family what is at stake. Yet they cannot ask without seeming to weigh up their own future, and to some extent they do. They wait for a sign, and meanwhile one or two begin listening to other offers.
The result is a silence nobody chose. Each person waits for someone else to make the first move, and each has good reasons not to make it. The subject surfaces sideways, as a joke over Sunday lunch, and disappears again.
What silence decides for you
Not talking about succession does not stop it; it merely leaves it unprepared. Sooner or later it comes, because the founder decides or because of circumstances nobody chose, and which of the two it is makes a world of difference, to the business and to the family.
If there is no will, the law decides who inherits and in what proportions. If there is one that nobody has looked at for years, it may describe a business and a family that no longer exist. In many countries children also have a legal entitlement to a share of the estate or of its value, such as the legítima in Spain or the Pflichtteil in Germany and Austria. Holdings in the company may sit for a time with several heirs at once, who must act together precisely when the person who used to decide is no longer there.
There is a scenario discussed even less: that the founder cannot sign for a period, or at all. If bank mandates, signing authority and every important decision run through one person, the business can stall over routine matters such as paying a supplier or renewing a credit facility. What arrangements exist for that situation, and how they are put in place, is a question for your lawyer or notary.
Then there are costs that appear on no balance sheet. Good managers leave when they see no future. Children who were waiting for a sign build their lives elsewhere, and by the time it comes they already have another home, another job, other commitments. Banks and major customers do their own sums: a business whose continuity depends on one person, with no successor in sight, carries one more risk.
And there is a cost to the founder. While they can still choose, the shape of their departure belongs to them: the pace, the role they keep for a while, what they hand over, to whom and when. When succession arrives by surprise, all of that is decided by others, or by the law. Silence seems to protect the founder’s place; in reality it only postpones the one decision nobody else can take.
When the children do not want the business, or dare not ask for it
In many families it is taken for granted that the business will pass to the children, yet the expectation has rarely been said aloud. Nobody asked them, and they never said no. Over time, a possibility hardens into a duty that nobody imposed and everybody feels.
A son or daughter is entitled not to want the business. They may have another calling, another idea of how to live, or may simply have seen at close quarters what it cost their father and want something else. Saying so is not a betrayal. Keeping quiet can lead to the worst outcome: someone who takes on a role out of loyalty, without wanting it, and fills it for years without conviction.
There is also the opposite case, spoken of even less: the son who does want the business and does not know whether his father thinks him capable. He waits for a signal that does not come, reads meaning into every remark, measures his work against that of the long-serving finance director. Asking for the succession would feel presumptuous; not asking, like giving up. So he says nothing.
It helps to know that inheriting a business and running it are two different things. Ownership can pass to the children while management goes to an outside professional, or management to one child and ownership to all, or the two can be combined differently. Some families sell, others bring in a partner, and no model is better in the abstract. Which combinations are open to you, and what each would mean, is for your lawyer and tax adviser to examine. The family’s part is for each person to say what they want.
With several children comes the question of a fair division, which is not always an equal one: the child who has spent half a lifetime in the business and the one who lives abroad do not have the same relationship with it. That conversation is best held with the notary and the lawyer present, and not for the first time once the estate is being divided.
When the business reaches a generation that never saw the years in which it was built, another layer appears: whoever decides inherits the results of choices whose reasons nobody explained. That is the subject of our note “The third generation”.
What do the notary, lawyer and tax adviser handle?
Anything in a succession that has to be signed, registered or taxed is a matter for professionals, and they should be involved before anyone else, us included. Talking to them commits you to nothing; it tells you how much room you have.
Depending on the country, a notary or a solicitor prepares or records wills, gifts and many of the documents that organise a handover, and can explain what would happen if nothing were done. That is the person to ask first about any share reserved by law for the children, about your matrimonial property regime and, if the family has assets or a home in more than one country, about which law will govern the estate.
The corporate lawyer checks what the articles of association and any shareholders’ agreement say about the transfer of shares: who may join the company, what happens when a shareholder dies, what majorities decisions require. In many family businesses those documents date from the founding and have not been read since. The same lawyer can guide the family through a family charter, if it decides to draw one up.
The tax adviser works out the cost of each route: a lifetime gift or an inheritance, a single transfer or a staged one, which assets sit inside the company and which outside it, and why. Tax rules on passing on a business differ from country to country, and where reliefs exist they tend to come with conditions that cannot be met overnight. Your adviser will tell you which may apply and how much lead time they need.
For the first meeting nothing needs to be decided. A handful of questions is enough:
- What would happen to the business if I could not sign anything tomorrow?
- Does my will still reflect the family and the business I have today?
- What do the articles say about heirs becoming shareholders?
- What ways are there to hand the business over in my lifetime, and what does each cost?
- What would need to be in place years in advance?
If you are the heir, your questions are different, and you can put them to your own lawyer: what rights you have, what obligations you would take on and what happens if you decline them. Either way, bring what you know, not what you fear. Why we insist on this order is explained in our note “Where the lawyer ends”.
Letting go of what you have built
Everything so far can be written down, signed and calculated. What follows cannot. For someone who has built a business, retiring is not a change of hours: it means no longer being, every morning, the person everyone is waiting for. The business has been their place in the world, their daily conversation and, at times, their closest family.
The day after is hard even to picture. What to do at eight in the morning, whom to ring, who will still ring. Some founders speak quite easily of “when I’m gone” and yet can barely bring themselves to say “when I retire”. The first refers to a distant, indefinite day; the second forces you to think about a particular Monday.
Then there is the fear of seeing the work carried on in someone else’s hand. Whoever follows will change suppliers and procedures, perhaps the way staff are managed or the name of a product. Some things they will do better, some worse, and all of them differently. Accepting that in advance is probably the hardest part of the handover, and no document prepares anyone for it.
The heir gives something up too, more quietly. Succeeding someone who is still there, at the same table, watching, is a craft nobody teaches. Sometimes it means leaving behind a life of one’s own outside the business; sometimes, accepting that the relationship with a father who was also a boss will change for good. That does not fit into a family charter either.
This part lies outside any adviser’s brief, because their work is the handover, not the person living through it. And the people one might talk to about it are usually the very people involved: a spouse, the children, the managers. The more senior someone becomes, the fewer people they can speak to freely, as we describe in our note “No one to talk to”.
There sometimes comes a point when the papers are with the right people and yet the personal side still weighs: what it means for you to step back, to take on the business or turn it down, to stop waiting or to leave. That is where a private conversation, outside the family and the company, can make sense. It centres on you: what place you want to occupy from now on, what you find hard to let go of, what keeps you where you are. We work alongside your lawyers and advisers, never in their place, and the decision remains yours. It begins with a message or a call: we listen, assess whether we can contribute anything and answer yes or no, with the reason. The full sequence is set out under “What happens before you accept a case?”.
What can you prepare before the first conversation?
Before speaking to anyone, there is work to do alone, on paper: finding out what you actually think, which is not always what you say at family lunches.
If you are the founder
Write down what exists only in your head: which banks know the business through you, which customers buy because they know you, which agreements were sealed with a handshake and never put in writing, which contacts, passwords and commitments nobody else knows about. The list is for you alone: an inventory of what would be left hanging if one day you were not there, and it may be longer than you expect.
Then write down, without censoring yourself, how you would like to step back: at what pace, what role you would like to keep for a while, what you could not bear to watch. And answer a question that sounds simple: how long have you been thinking about it? If the answer is “for years”, the silence already has a history of its own. It is the first of the three questions before deciding that we suggest for any weighty choice.
If you are the son or daughter
Separate what you want from what you think is expected of you. Do you want to run the business, to own part of it without running it, or neither? What would you need in order to say yes: a timetable, clear responsibilities, real authority rather than a title? Nobody can answer that for you, and it is better to have thought it through before you are asked.
Note down, too, what you are afraid of hearing: that your father does not think you ready, that he prefers a sibling, that he never intends to stop. Having it on paper lets you compare, when the moment comes, the answer you hear with the one you have been imagining for years.
If you are one of the managers waiting
Your room for manoeuvre is smaller, but it exists. You can ask yourself honestly what you need to know to decide whether to stay, and by when. You can ask for clarity about your own position, which is your concern, without demanding an account of the succession, which is the family’s. And you can decide how much longer you are prepared to wait without an answer.
How do you start a conversation about succession?
No sentence works in every family, and it is wise to be wary of anyone who offers one. Some conditions do help. The first is the setting: not Christmas lunch, not the office with managers on the other side of the door, not the tail end of an argument about something else. Better a private, unhurried conversation, somewhere nobody has to leave after half an hour.
The second is to begin with a question rather than a proposal. “How do you see the next few years?” leaves more room than “We need to talk about succession”. “Have you ever thought about running the company?” leaves more room than “I’m counting on you”. A proposal asks for a yes or a no; a question lets people think aloud.
The third is not to ask for an answer that day. Someone who has avoided a subject for years needs time to sort out what they think, and a first conversation that settles nothing can still be a good first conversation. Saying so plainly, with something like “You don’t have to answer now”, can ease the pressure on both of you.
If you are the founder raising the subject, you hold an advantage that often goes unused: your word gives others permission. Once you say you want to talk about it, the question stops feeling disrespectful. You can start from the little you already know, even if that is only that you do not yet know how, and admitting as much costs you no authority.
If you are the heir, it is often easier to talk about the person before the business: how your father or mother sees the coming years, what they would like to do with their time. Another, more neutral route is to suggest a review of the documents with the notary or tax adviser: the conversation then begins with the practical side, and the personal can follow.
There are also ways of raising the subject that tend to close it. The ultimatum: “Either you tell me something this year or I’m leaving.” The messenger, whether mother, uncle or trusted finance director, who ends up carrying a message that is not theirs. And the conversation in front of siblings or spouses, where everyone is also answering with one eye on the others.
What remains is to accept from the outset that the answer is not in your hands. You can open the conversation in the best conditions and meet silence, postponement or a no. That, too, tells you something: where the other person stands. And it hands back to you the question that is genuinely yours: what you do from there.
Frequently asked questions
How do I talk to my father about succession in the family business?
In private, without hurrying, and starting with a question about his life rather than the business: how he sees the next few years, what he would like to do with his time, what is on his mind. Avoid family meals, ultimatums and go-betweens, and do not ask for an answer the same day. Beforehand, be clear with yourself about what you want: to run the business, to own part of it, or neither — or admit that you do not know yet.
What happens to a family business if the owner dies without a will?
The rules on intestacy decide who inherits and in what proportions. What happens in practice also depends on the articles of association and on which country’s law governs the estate. Your notary or lawyer can explain how this applies to you, and the question can be asked long before it arises.
What if I don’t want to take over the family business?
Say so, in private and early, before the handover is planned around you. Not wanting to run the business is a legitimate decision and does not necessarily mean giving up your inheritance, because ownership and management can be separated. The legal and tax consequences of each option, including renouncing an inheritance, are for your notary or lawyer to explain before you sign anything. Your part is to be clear about your reason and to state it without apologising for it.
When should succession planning start in a family business?
There is no fixed age, but there is a test: while the founder can still choose the pace and shape of their departure. An orderly handover takes years, because it combines legal documents, tax arrangements that need lead time and a period in which founder and successor work side by side. Starting early does not mean stepping down early. It means having arranged what happens if something changes suddenly, so that the rest can be decided calmly.
What should I do if none of my children wants to take over the family business?
Treat their answer as information, not rejection, and ask each child what connection with the business they would like to keep: not wanting to run it does not always mean wanting nothing to do with it. Ownership and management can be separated; some families bring in an outside manager, others take on a partner, others sell. Which routes are open to you, and with what consequences, is for your lawyer and tax adviser to work out. The decision remains yours.
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