One shocking fact about family businesses is that even though around 40% are usually going through some form of ownership transferal, only one-third of these attempts actually succeed. Moreover, from these remnants, only 50% will ever make it to a second generational transfer.

There are several factors for this unfortunate percentage, but this primarily happens due to poor management in transferring ownership as each generation struggles to successfully survive the change. Our estate planning lawyers in Madison can help you examine your own family business to see where it is in danger.

Some factors contributing to the success or failure of a family business include:

• The level that the founder has prepared estate planning for the whole family – If owners have not carefully planned out whether their spouse, children, or a non-related employee will run the business, it is very easy for the company to go downhill quickly without the organization of a primary head.
• Estate tax uncertainty – Federal estate taxes are constantly changing, both in the White House and in congress. In addition, several states tend to require their own individual estate taxes, so if you have not planned how to properly liquidate your estate, your family might be forced to give up the business just to pay off debts of estate taxes.
• Carefully coordinated financial and estate plans for future years – In order to make sure all of your business objectives are properly funded, you need to come up with a detailed estate plan which will be able to offer the right amount of liquidity not just for estate taxes but for business debts, and any other needs of your family who are dependent on the business but not necessarily contributing to its activity.