In this blog I want to talk to you about a challenge I see all too often—what happens when it’s time to pass down a family business, but the kids haven’t all contributed equally over the years. If you think that sounds like a recipe for drama, you’d be right. Let’s dig into one of those real-life “family feud” cases that has consumed a good bit of my time lately.
When Equal Isn’t Always Fair in a Family Business
We’re talking about a family business—not just a job, but the legacy of someone’s blood, sweat, and tears. In this case, it’s a successful manufacturing company built up over decades. Now the parents want to pass it down and be fair to all their children. Sounds simple, right? Split it into thirds and call it a day.
Not so fast.
Here’s where things get tricky. One of the kids has worked in the family business for years—helping it grow, solving problems, carrying the weight. The other two? One’s more or less been uninvolved, and the other… well, let’s just call him the problem child. Always stirring the pot, always looking for a fight. You can already see how “fair” becomes subjective real quick.
Protecting the Business While Honoring the Family
So how do you do right by all the kids, and protect the family business at the same time?
In this case, we explored putting the company into a trust. That gives some structure and legal oversight once the parents are gone. But even that’s not a perfect fix—especially when the problem child is also named as a trustee. Imagine giving someone like that access to company records, trade secrets, and decision-making power.
We had to get creative. One of our key moves was to create a long-term employment contract for the child working in the family business. We even included what’s called a “golden parachute”—a financial cushion if they’re ever forced out without cause. That alone discourages bad-faith efforts to push them out. It’s expensive for the business to lose them, so everyone has an incentive to keep things running smoothly.
We also had to build guardrails to keep the problem child from disrupting the family business under the guise of “being a trustee.” While shareholders do have certain rights—like seeing quarterly financials and tax returns—they’re not automatically entitled to go on a deep dive into the books just because they’re nosy or trying to stir up trouble.
Under Georgia law, you can set boundaries on that. So, we created language that only allows document access if it’s for a valid purpose, and even then, an independent party must approve the request. That stops the fishing expeditions before they start.
The Emotional Toll of Handing Off a Family Business
This isn’t just about legal contracts and shareholder rights. At its core, this is about family. And it’s painful. I’ve sat across the table from parents who feel torn. They love all their kids. They want to believe the best. But they also want their family business—the thing they built from scratch—to continue after they’re gone. They want to reward the child who stayed loyal. They want peace in the family. And sometimes, those things pull in opposite directions.
The hardest part? The parents know the problem child is going to cause trouble. They say it out loud. But out of guilt or obligation, they still want to include them. I understand that. Completely. But when it comes to protecting the family business, you’ve got to be smart, not just sentimental.
This particular case is still unfolding. We’ve made progress—drafted the trust, created protective employment terms, and worked out a possible trustee structure that doesn’t give too much power to the wrong hands. But it’s not over. These situations never resolve in a single meeting. They take time. They take tough decisions. And they take creativity.
Lessons for Every Family Business Owner
If you’re in a similar situation—if you own a family business and have kids with wildly different levels of involvement—it’s time to start thinking about this. Don’t assume that leaving everything equally will result in peace. It often results in the exact opposite.
Here are a few quick takeaways:
- Start planning early. Don’t wait until retirement or a health crisis.
- Be honest about your children. You know who’s dependable and who’s not.
- Use legal tools wisely. Trusts, contracts, and bylaws can protect the business and your legacy.
- Communicate openly. Surprises lead to resentment. Clarity leads to peace.
The family business is more than an asset—it’s a living, breathing legacy. And how you pass it on matters just as much as how you built it.
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