Gerard Brew is a partner at the law firm McCarter & English LLP, but there are times he seemingly has to function as a psychologist when he works with family business owners on estate tax planning matters.
“People can be focused on tax issues, but must also understand family dynamics,” he said. “It’s important to listen to what family members are saying about their personal goals too.”
Next-generation family business planning can easily spark a lot of friction, he added, since personality, financial and business issues are often a volatile combination. In some cases, a family member may start a business, get divorced and then remarry. “What happens if the business owner has grown kids from the first marriage who could conceivably run it, but the second spouse wants liquid assets? Things can get emotionally tangled [and] the issue could become a financial drain if it goes to litigation.”
Click to read full article: “Paying It Forward: How Good Communication, Planning Amongst Kin Can Help to Minimize Tax Bite on Family Businesses” (Subscription required)