A lack of communication is the most common—and most costly—mistake family enterprise owners make when planning for the future. Values-based conversations, proactive planning and collaborative advisory teams can prevent disaster and preserve both wealth and relationships across generations.
I spoke about the critical role of communication in successful family business transitions with Sandra Pollack in a recent Beyond Succession podcast. Sandra is a family enterprise advisor and author of "Don't Leave a Mess! How to Disaster-Proof Your Family Legacy."
The number one underlying factor is lack of communication—what I call "the price of silence." Business owners who create wealth often don't want to talk about it with their families, usually because of unhealthy money scripts we develop growing up.
We all have relationships with money shaped by our childhood experiences. Did your parents discuss money at the dinner table, or was it considered rude? These early impressions influence whether we're comfortable discussing wealth later in life.
But here's the key insight: conversations about money aren't really about material possessions—they're about values, not valuables. When you dig deep and ask someone what's important about money, it's about financial security, independence, and legacy for family or charitable causes.
There's a fundamental discomfort about death. People fear coming to grips with their own mortality, even though death is the one thing I can guarantee with 100 percent certainty when doing estate planning.
Business owners are independent, creative heroes who think about opportunities. Passing on doesn't look like an opportunity. Owners also want to be in control and make their own decisions. But without planning for the inevitable, everything they've built and controlled can spiral out of control.
If they don't plan, the government wants taxes first, creditors want payment second and the family they intended to care for comes last—exactly the opposite of their priorities.
I see two major issues. First people focus on tax savings above everything else. They'll ask accountants and lawyers to create structures to save taxes, but the tail ends up wagging the dog. Your life isn't a tax deduction, and neither are your children.
You need to start with priorities: family relationships, children and financial literacy. There is also the unfortunate possibility of divorce situations. Then look at tax implications.
Second, there's a lack of collaboration among professional advisors. They often work in silos—insurance, estate planning, legal, accounting. Cooperation means everyone's nice to each other. Collaboration means that we work together for the benefit of the client and share information that could significantly impact planning decisions.
You need someone to act as a coach—keeping the ball moving with both clients and other advisors, creating deadlines and accountability. This person needs four qualities: they must be alert, resourceful, responsive and genuinely care.
Each profession has biases. I focus on risk and liquidity because I've seen businesses sold to pay estate taxes. Lawyers think about organization and creditor protection. Accountants focus on tax efficiency. Investment advisors want to grow portfolios.
We must recognize these perspectives and remain open to changing recommendations based on client priorities and family circumstances.
I recommend two essential tools. First, a family business playbook that addresses: "What happens if I don't wake up tomorrow?" This isn't just retirement planning—it's involuntary retirement planning.
You need understudies for key roles, strategies to retain important employees, family rule books covering compensation and exit procedures, and plans for preparing heirs for wealth. Lottery winner statistics prove that without proper tools, wealth dissipates quickly.
Second, create a family desk reference listing crucial information: key advisors, insurance policies, property deeds, passwords and investment accounts. When grief strikes—and every grief journey is unique—families shouldn't waste time hunting through files or being locked out of accounts.
When's the best time to plant a tree? Twenty years ago. When's the best time to start your planning? Twenty years ago. If you haven't done it twenty years ago, then start today.
Pick up the phone. Call one advisor you trust—someone competent who genuinely cares about you. You don't need millions in the bank to begin planning.
As we age, there's a shift toward elegant simplicity. Invest in simplicity, peace of mind, tax savings and most importantly, family clarity and harmony. With the right plan and professionals at the table, you're investing in your family's future.
Don't let the complexity overwhelm you. Just start somewhere, with someone you trust, and build from there.
The full Beyond Succession podcast episode on disaster-proofing your family legacy is available here. If you would like to discuss this topic further, or any other aspect of business succession, please contact Leah Tolton.