A business owner faces a dilemma: he has a married son and a married daughter. He believes his daughter is the smarter of the two and wants to give her 75% of the business, leaving 25% for his son. But what if his daughter is not interested in running the business? What happens then?
That’s a brilliant question to consider. I had a conversation about this just last week, and it led to some fascinating insights for a potential client to think about.
Inheritance of Money vs. Inheritance of Power
Money and power are two entirely different forms of inheritance.
- Money is a resource, and its impact depends on the hands that hold it.
- Power, on the other hand, requires capability, vision, and responsibility.
Does money spoil children? Not necessarily. But if they do not know what to do with that money, then yes, it can ruin them. That is why the inheritance should not just be about the transfer of wealth but also the transfer of wisdom.
The Importance of a Succession Plan
As a business owner, have you given thought to your succession plan?
- Who will lead the company when you step down?
- Have you prepared your children to take over, or are they left to figure it out on their own?
- Should inheritance be based on capability or equal division?
- What structures can you put in place to ensure a smooth transition?
Many business families establish family constitutions, governance boards, and structured transition plans to prevent conflicts and provide a clear roadmap for leadership.
Who Should Inherit More—The Smart One or the Not-So-Smart One?
If your children are smart, support their dreams. If they cannot make wise decisions, you still need to ensure their survival.
In both scenarios, money plays a critical role.
Education is often seen as a backup plan, but it doesn’t necessarily dictate a person’s future success in business. Many successful business leaders did not follow a traditional educational path but had the right mindset and support system to build wealth and sustain it.
Common Pitfalls in Succession Planning
- Assuming fairness means equality: Dividing a business equally between heirs without considering their capabilities can lead to conflicts or business decline.
- Lack of training and mentoring: A successor needs experience, not just inheritance.
- Ignoring legal and tax implications: Poor planning can lead to unnecessary tax burdens and legal disputes.
- Failing to communicate early: Clarity and alignment among family members reduce the chances of misunderstandings.
What Do You Want Your Children to Inherit?
Is it just wealth, or do you want them to inherit your values, vision, and legacy?
A large inheritance can sometimes be a double-edged sword. It may bring financial security but should also come with a sense of responsibility. Many wealthy families create structures, like trusts, unique Asset Structuring, or staggered inheritance models, that ensure money is used wisely while fostering closeness within the family.
The Ultimate Question: What Do You Want to Do with Your Wealth?
Before deciding who gets what, take a moment to reflect:
- What is the purpose of the wealth you’ve created?
- How do you want your children to use it?
- What will bring long-term success and harmony within your family?
- Have you structured your estate to minimise risks and maximise continuity?
There are no right or wrong answers, only perspectives to consider. And in the end, a well-thought-out succession plan ensures that your legacy doesn’t just survive—but thrives.
