Andrew Sukhin is Managing Director of AGS Wealth Management of Raymond James.
We are entering a pivotal era of unprecedented wealth transfer across the country. But while the scale may be national, the experience is deeply personal because every family dynamic is unique.
When family wealth is primarily composed of liquid or semi-liquid assets, inheritance planning, while nuanced, is relatively straightforward. However, when that wealth is tied to a family-owned business, the planning becomes far more complex. It’s not just about being fair, it’s about being intentional. And that begins with understanding the personalities of the next generation and their readiness to receive and steward wealth.
After more than 30 years of working with multigenerational families, I’ve come to recognize five recurring beneficiary profiles. These often coexist within the same family, and navigating them with care is key to a successful transition.
The Quiet Operators
Already deeply involved in the day-to-day operations, these individuals are often the ones truly running the business behind the scenes. For them, transitioning ownership is a natural progression—often a technical matter that, while complex, is highly achievable.
So, the family should concentrate on transitioning ownership to these “quiet operators” in a tax-efficient way—without the perception of favoritism. As initial steps, controlling shareholders should utilize recapitalization strategies (e.g., voting/non-voting shares), lifetime gifting exemptions, valuation discounts and tools like grantor retained annuity trusts (GRATs) and intentionally defective grantor trusts (IDGTs) to help ensure ownership is transferred tax-efficiently.
The Formal Successors
These individuals want the title of ownership but not operational responsibility. We view them as custodians, not operators.
Alongside a strategic ownership transfer, the “controlling generation” should focus on building a capable and incentivized management team, implementing profit-sharing, equity compensation and long-term planning to sustain business success and continuity.
The Responsible Stewards
They are not interested in running the business or being seen as business owners, but they care deeply about continuing the family legacy through philanthropy and social impact.
In these cases, the family should go through all pre-sale preparation steps as early as possible to be in a position to monetize the assets on their terms and timeline. Structuring gifts of discounted interests, utilizing GRATs/IDGTs and creating charitable vehicles such as private foundations or donor-advised funds (DAFs) provides the opportunity to minimize capital gains tax while amplifying impact.
The Rebels
They push against family expectations and traditions, seeking to carve out their own identities and success.
Here, the family approach should be like that of the Responsible Stewards. The business should be sold while the “value creation” generation is still in control. But additional care should be taken in setting up protective trust structures that preserve family wealth while allowing these beneficiaries space to grow, mature and pursue their individual paths.
The Lost Heirs
These individuals haven’t yet found their direction—and often struggle with the expectations that come with wealth.
These cases should be treated much like the Rebels, but with one key addition: Family should consider the creation of a family advisory council. A family advisory council or family advisory board helps to guide the decision-making process as well as preserve family values. It can include family members as well as outside professionals, such as attorneys, accountants and financial advisors. This provides a supportive structure that guides the next generation through times of uncertainty and helps them define their own values and aspirations.
In Conclusion
Successfully passing down a family business requires more than just financial strategies; it demands emotional intelligence, foresight and personalization. The role of a financial advisor is to help families recognize the unique identities of each beneficiary, accept them and create a framework where everyone has the opportunity to flourish.
No matter the profile, advisors must ensure that each transition is approached with care, clarity and the most tax-efficient strategies available.
This information is not a complete summary and does not constitute a recommendation. Individual situations vary; consider your goals, risk tolerance, and time horizon before making decisions. Consult your financial advisor about your situation. Opinions are those of Andrew Sukhin, not Raymond James, and may change. Raymond James and its advisors do not offer tax or legal advice; consult a professional for such matters. Links are for information only; Raymond James is not affiliated with or responsible for their content. Raymond James & Associates, Inc., member New York Stock Exchange/SIPC 1010 S. Federal Hwy Ste 2002 Hallandale Beach, FL, 33009 (305) 466-4655.
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