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Preparing for the Transfer of Ownership, Business Families and Family Businesses: The STEP Handbook for Advisers


The transfer of ownership is one of the most significant events in the life of a family business. Over the past two decades many business families, especially those who own medium-to-large enterprises, have invested much time and resources preparing an orderly transition of their wealth and their enterprises. Many have adopted family constitutions and formal shareholders’ agreements to regulate the relationships among their heirs for generations to come. The Dickensian image of the family meeting at the lawyer’s office, to hear for the first time a relative’s last will and testament, is increasingly a thing of the past. Today, much emphasis is given to the creation of structures and organisational forms (such as trusts, holding companies, shareholder contracts and family protocols) with the hope that these mechanisms will minimise estate taxation and at the same time preserve family harmony in the future. While it is early to tell on the aggregate whether these instruments have in fact accomplished their intended purpose, our experience over 20 years working with business families is that these tools are certainly no panaceas: despite much effort to avoid inheritance and succession conflicts through formal legal arrangements, many business families still run into serious trouble during generational transitions. While we strongly support the notion that formal agreements and legal structures regulating owners are helpful and, indeed, often necessary for the successful continuity of a family enterprise, experience shows that these tools are certainly not sufficient. For there is no legal agreement or structure that, at the end of the day, does not depend on the good will and commitment of the people whose life it sets out to regulate. At first brush this may seem like a self-evident, if not obvious, idea. However, in the seemingly ‘messy’ process of generational transition many business owners and their advisors are often seduced by the tangible nature of the legalities. In these processes trusts, contracts and structures seem like terra firma in the sea of vague familial obligations, promises and good intentions.




Ivan Lansberg, Maria Dolores Moreno

Date Published



Lansberg, Ivan, and Maria Dolores Moreno. 2015. Preparing for the Transfer of Ownership. Business Families and Family Businesses: The STEP Handbook for Advisers.


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