If you’re thinking of passing on your family business, the process can get complicated. Maybe you have four children, and you’re dividing everything you own evenly. But what about the business?
Perhaps you have someone in mind who you think can carry on your legacy at the company. Your other heirs, as much as you love them, are simply not fit for the task. Do you have to make things equal for your heirs — or can you simply leave the business to one person?
You are allowed to do whatever you wish
You certainly can leave the business to only one of your heirs. This is your company, your estate and your decision. It is more common to divide the business equally, but not by much — 60% to 40%. If you want to pick one person and leave the others out, you are definitely allowed to do it.
Will doing this cause problems between your survivors? It may. It can cause resentment between your heirs. If you don’t offset your other assets to make up for the value of the business, they may think you were showing favoritism.
That being said, there is nothing that says you’re not allowed to show favoritism, and your estate won’t get overturned on those grounds alone. If your heirs claim the person who got the business used undue influence to get a bigger share of your assets, they could contest your will, but simply not liking to outcome is not a reason for a successful challenge.
The key to successful estate planning is to learn as much as you can about your legal options in advance so that you can set everything up, explain your decisions and make the best choice for your family and for the company.
Notice: We are providing this as general information only, and it should not be considered legal advice, which depends on the facts of each specific situation. Receipt of this content does not establish an attorney-client relationship.