Caleb White of CFAR noted that a tiny fraction – estimated at 13% – of family businesses make it to the third generation. A similarly small fraction of family compounds as well. How to increase the chances for success?
“ In our work with family businesses, we often see the leading generation—parents, grandparents—creating property that is the start of a family compound that they come to see serving as a common ground—figuratively and literally, for future generations…But like anything else that brings families and their economics together, some forethought can go a long way. Joint ownership of property can be like dynamite—with disagreements causing fissures between family members as they try to navigate the waters of working together as owners and occupants of the beach house, the ski chalet, or urban apartment.”
Caleb walks us through some key attributes of families who have successfully navigated joint ownership over generations. Not surprisingly, one of the top shared qualities is effective communication and thoughtful planning – which is where Caleb’s firm, LandVest, and excellent estate planning attorneys like Martha Frahm at Goulston & Storrs, who also contributed to the analysis, can help.