Overcoming Adversity: The Loss of a Family Member
May 19th 2008 03:02
One of the worst possible things that can happen to the family business is guaranteed to eventually happen at some point. The loss of a family member can be extremely devastating because it is a two-fold loss; the family loses a member and the business losses a member.
Whether it is the loss of the owner, partner, manager or employee, the business will be thrown into a time of emotional turmoil. So how will the business handle this loss, and how will the family cope with the loss?
The Business Side
This is one reason why Succession Planning is so vital to the long-term strategy of the business. With a good succession plan, the business side of the family business is accounted for. Having that contingency plan in place will free the family from being troubled by business issues while trying to negotiate family healing.
Likewise, the legal structure of the business is very important in the event of a death. If the family business is a sole proprietorship, when the sole proprietor goes the business is gone too.
A partnership could also be disastrous because all debts and other liabilities would be forced entirely on the remaining partner. You need to either have some type of Spousal Consent / Waver Agreement in place, or make spouses legal partners or co-owners in an LLC.
Three good options for you to choose from that would allow a company to continue would be to set up the company as an LLC, S Corporation, or C Corporation. These types of businesses are easier than ever to establish and have advantages and disadvantages depending on what country or state you create it in.
Key Note: It is important to have the business side fully secure in the beginning. That way when adversity strikes, the business is not a liability or the focus of attention. Instead it will be an asset and a source of strength.
The Family Side
The heart of the family business truly is the family behind the business. In order to heal the business, the family must be healed first. Each family member will go through his or her own unique grieving process, and the time that it takes to heal is specific to the individual.
There are common feelings to be aware of such as shock, regret, denial, depression, anger, and blame. It is important to realize that not everyone will react the same. These feeling are initially based on thoughts and quickly turn into a whirlwind storm of emotions.
Do not expect everyone to act logically in the face of overwhelming emotions. Do the things that require logic long before your loved one passes on. Estate planning and creating a Living Trust are crucial to avoiding the hassle of probate. Just like creating an LLC to buttress the business side, creating a Living Trust is much easier now than it has ever been.
Key Note: Going as a group, or individually, to a good counselor or psychologist may provide great help during the healing process.
If In Doubt Go To a Professional
When it is time to file taxes for a business, most businesses typically use a professional known as a Certified Public Accountant (CPA). Turning to a professional for help with the grieving process is a solid plan to overcome the emotional trouble that you are facing. There is no shame in it at all. In fact, it would be inline with a good business strategy.
Using professionals to set up a Living Trust, to create an LLC, or provide Psychological counseling, will eliminate the guesswork you would face if doing these tasks yourself. After all, the rule is to outsource everything except your core competency.
Dealing with the death of a beloved family member is a difficult task. By following these tips, it will ease a bit of the pain and difficulty, and help you get through your and your business's time of adversity.
Whether it is the loss of the owner, partner, manager or employee, the business will be thrown into a time of emotional turmoil. So how will the business handle this loss, and how will the family cope with the loss?
The Business Side
This is one reason why Succession Planning is so vital to the long-term strategy of the business. With a good succession plan, the business side of the family business is accounted for. Having that contingency plan in place will free the family from being troubled by business issues while trying to negotiate family healing.
Likewise, the legal structure of the business is very important in the event of a death. If the family business is a sole proprietorship, when the sole proprietor goes the business is gone too.
A partnership could also be disastrous because all debts and other liabilities would be forced entirely on the remaining partner. You need to either have some type of Spousal Consent / Waver Agreement in place, or make spouses legal partners or co-owners in an LLC.
Three good options for you to choose from that would allow a company to continue would be to set up the company as an LLC, S Corporation, or C Corporation. These types of businesses are easier than ever to establish and have advantages and disadvantages depending on what country or state you create it in.
Key Note: It is important to have the business side fully secure in the beginning. That way when adversity strikes, the business is not a liability or the focus of attention. Instead it will be an asset and a source of strength.
The Family Side
The heart of the family business truly is the family behind the business. In order to heal the business, the family must be healed first. Each family member will go through his or her own unique grieving process, and the time that it takes to heal is specific to the individual.
There are common feelings to be aware of such as shock, regret, denial, depression, anger, and blame. It is important to realize that not everyone will react the same. These feeling are initially based on thoughts and quickly turn into a whirlwind storm of emotions.
Do not expect everyone to act logically in the face of overwhelming emotions. Do the things that require logic long before your loved one passes on. Estate planning and creating a Living Trust are crucial to avoiding the hassle of probate. Just like creating an LLC to buttress the business side, creating a Living Trust is much easier now than it has ever been.
Key Note: Going as a group, or individually, to a good counselor or psychologist may provide great help during the healing process.
If In Doubt Go To a Professional
When it is time to file taxes for a business, most businesses typically use a professional known as a Certified Public Accountant (CPA). Turning to a professional for help with the grieving process is a solid plan to overcome the emotional trouble that you are facing. There is no shame in it at all. In fact, it would be inline with a good business strategy.
Using professionals to set up a Living Trust, to create an LLC, or provide Psychological counseling, will eliminate the guesswork you would face if doing these tasks yourself. After all, the rule is to outsource everything except your core competency.
Dealing with the death of a beloved family member is a difficult task. By following these tips, it will ease a bit of the pain and difficulty, and help you get through your and your business's time of adversity.
Metropolitan Cathedral 1 Curitiba Brasil
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Comment by Fobzy
Fobz
Well, not understanding half the words you use, I do understand the other half so it seems my little venture is not quite off the ground as yet. Sometimes I think I should just stick with the breeding of horses, that is my passion after all, but so is gambling, which is why I'm here to make some pin money, but we all have great expectations, can't get anywhere without those.