A recent study shows 8 in 10 families are taking steps to pass on wealth to their heirs. Ameriprise Financial Inc. did the Money and Family Study It revealed 67% of people say passing on the family business to an heir is essential. Still, they’re keeping their intentions to themselves. The study also showed why people are not discussing their plans with a potential heir. 

  • 33% said it was none of their business. 
  • 32% said they had shared some information but didn’t find it necessary to be completely transparent.
  • 18% said they don’t want to deal with conflicts that may arise after choosing an heir.

Whatever the reason, you should reconsider waiting to choose and train an heir. An unprepared successor can ruin your family’s plans to become the next Walton family or the Rockefellers.  The Managing Director for the Business Development Bank of Canada says preparing your heir is not something to be done overnight. He says it’s rare for a second-generation family member to successfully step into a CEO role without active mentoring. That’s why the BDC advises entrepreneurs in hopes of helping make a smooth business transition while protecting their family’s future for generations to come. Here are a few tips they give to clients. 

First, you should start early to avoid a rushed or sudden transition. Experts say a successor needs at least five years to be prepared. The next tip, make sure you choose a suitable successor. Selecting a suitable successor does include determining a child or sibling who wants the responsibility. Third, while training your successor, identify and rectify knowledge gaps. A good way to do this is by allowing your successor to work in various roles throughout the company. Last, when you plan to retire, consider exiting in stages to make a smooth transition.

Building generational wealth is a lifelong process. You don’t want to see your life’s work fail because your family is not prepared to take over what you built. Whether you’re trying to learn how to build generational wealth or maintain it, Patrick Bet-David’s Generational Wealth workshop will help you along your journey. The self-made millionaire, founder of PHP Insurance Agency and Valuetainemnt LLC, is offering the workshop for free. All you have to do is click the link below to register. 

 

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