For a family business owner, when the time comes to loosen the reins and consider what’s next, it’s rarely as straight-forward as they once imagined. The decision to sell or pass on your business to a family member is as nuanced as it gets. It puts you at a crossroads, where you must weigh the current value of your business against what future generations could build on the foundation you’ve laid. For the current leader, it becomes a deeply personal dilemma: are you making a smart move for your family by selling at the right time or letting go of a legacy that your family could continue to grow in the future?
At the same time, owners need to consider how to prepare the next generation for the responsibility of wealth that’s coming their way—and think about creating a well-thought-out succession plan to help ensure everyone is prepared for whatever the future holds.
This article explores how you can start preparing your family for the responsibility of wealth—whether the business stays in the family or not. And how that differs depending on which road you take.
Pass down or sell? The decision of what comes next is dependent on several factors, including family dynamics, potential successors, and the state of the business. A family business is a culmination of time, effort, and sacrifice, so it isn’t surprising that emotional attachment often makes it more challenging for owners to evaluate options objectively. Both options carry trade-offs—control versus cash, legacy versus independence. Despite the different journeys, the destination often looks similar—and successors will need to prepare to inherit wealth, either through the business itself or other assets.
The good news is you don’t have to make this decision alone or under pressure. Professional advisors, such as family enterprise advisors, can help analyze these factors and work with you and your family to help balance emotional and financial priorities while preserving family harmony.
While succession planning has always required emotional readiness, coming to the table with the right mindset also plays a big role in overcoming the challenge of bridging generational gaps in family business. Generational tension can arise when younger members push for rapid change and older members resist, fearing loss of legacy.
Succession isn’t just about assets—it’s about relationships. If there are concerns about emotional readiness, preparation and open communication continue to be a top priority. Both current and incoming leaders will need to practice patience and mutual respect to maintain healthy relationships and effective transitions. Professional advisors, such as family enterprise advisors, can help families transition with understanding and compassion—to help the younger generation approach the transition with curiosity and humility, and help current business owners allow space for new ideas and risk-taking.
Another common barrier to a successful business transition is a successor’s lack of financial literacy and limited visibility into their family’s finances and business operations. Without a true understanding of what the senior generation owns and how to manage that wealth, heirs could feel unprepared to step into an ownership position and manage the family wealth. But it doesn’t have to happen all at once; it can take time to figure out the path to gradual transparency.
Preparing the next generation can simply start with early with conversations about personal money management. For example, teaching basic principles like budgeting and explaining financial transactions in real-life situations. As financial literacy builds, you may want to expand on more complex concepts, such as wealth management and tax and estate planning. Eventually, for families with businesses, consider gradually sharing more personal and business information, including assets that extend beyond the company itself, such as investment portfolios, real estate, and trust interests. In addition, encourage the development of financial skills, such as investment strategies and reading financial statements. As children mature and their responsibilities in the family and business grow, increasing transparency can help financial stewardship feel natural when it matters most.
If there is a single person in the next generation ready to take over a family a business or prepared to receive family wealth in a different way, planning can be more straight forward. The more people and generations involved, the more complexity grows. With careful planning and formal communication forums, business and wealth succession can be a smooth transition, even when it’s being passed down to different generations in different proportions and at different times.
Family charters, regular strategic meetings, and other governance structures that include members of the family both in and out of the business can help with preparing the next generation for taking greater responsibility with family wealth. These governing rules and policies can help create space for learning and decision-making, even before formal succession begins. Open conversations about expectations, roles, and concerns are critical.
Business owners should involve heirs in the planning process gradually and consider working with a mediator or family business advisor to facilitate discussions and plan for increasing responsibility. This helps prevent misunderstandings and builds consensus on the best path forward.
Increasingly, our advisors are noticing that more Millennial and Gen Z children are questioning whether taking over their parents’ business is the right decision for them. And, their business-owner parents are also showing hesitation about placing their business in their successors’ hands. According to a US study from Wells Fargo, more than half (52%) of business owners don’t want their children to inherit and run the business—some due to lack of confidence that their children will keep the company on solid footing. In addition, more parents are simply coming to terms with their children’s interest in choosing their own path and have decided not to pressure them into inheriting their role.
If this is the case for your family, the path forward is less defined. However, the next generation will likely still inherit family wealth—even if it’s not the business itself. The principles of emotional readiness and financial literacy and transparency remain of utmost importance when planning for the future of family wealth. This also applies if you’re keeping the business in the family but there are family members that aren’t part of the business.
More than 60% of business owners don’t have a comprehensive plan for the future of their business or their family wealth, and 22% haven’t begun even basic transition planning, according to RBC’s Wealth Transfer Report.
Succession, whether of a business or wealth, isn’t a single event; it’s a journey that blends financial strategy with emotional readiness. You’re passing down assets—but also values, purpose, and confidence.
For families, the question isn’t just “who gets what?” but “who wants to lead, who’s ready to lead, and how will they lead?” It’s important to equip the next generation with resources, as well as the skills and mindset to make business and family decisions wisely. That means embracing education, fostering transparency, and creating governance structures that support collaboration.
Ultimately, a modern succession plan asks both generations to step into new roles with clarity and humility. With early planning, open dialogue, and the right professional guidance, families can turn uncertainty into opportunity—preserving wealth, relationships, and your legacy.
