Some interesting information from the company that did the succession planning was that about 1/3 of businesses handed down from 1st gen business owner/founder to second gen are successful. About 1/3 of those get passed to the 3rd gen are successful.

Now, what type of planning and integrating is down with kids into the business varies widely. I would imagine kids who never or rarely participated in the business would have a higher likelihood to fail than kids who have grown up in the family business. Those kids are usually taught to work and be respectful.

I think it just depends on how things are handled long before kids are handed money or businesses. I think good questions for parents to ask themselves are;

1. Will me giving this child this money/business/resource help or hurt them?

2. Does this child have a good work ethic?

2a. Does this child have the wherewithal to continue and grow this business?

3. Does this child struggle with vices or other poor judgement? Drugs, alcohol, etc.

4. What is my relationship with this child?

There are other questions that may be better. Obviously, if there are multiple children you have to ascertain if kids can get along. If a business, can they work together or should other kids be bought out or sell the whole thing and split it?

My in-laws have a business worth anywhere from 8-12 million. They have 5 daughters. He asked me one day when we were out and about if I would want to own their business with their kids. The SILs would be the ones to run it but we are spread out in 3 different states. 2 of the daughters live in the same town. We all get along and get together often. I told him I love them and their kids a ton. I would hate to ruin any relationship with them over the business and I think it would inevitably happen for one reason or another. I said I would rather we were bought out or we buy them out. Hopefully we don’t have to find out for a long time.

My mom passed away when I was in college and a newlywed. It cost me $8k to bury her. I don’t plan on getting anything from my side of the family.