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The Family Wealth Sustainability Toolkit: The Manual by Fran Lotery, Fredda Herz Brown

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FAMILY CONNECTION INDEPENDENT OF SHARING ASSETS

There comes a time in every family enterprise, usually by the third generation, when someone wants out of the shared asset pool. One or more members may feel sufficiently disengaged, or just have a need to be separate from the clan. Or perhaps they have a special need or want to pursue a venture independently of the family enterprise. Since we view the balance of separateness to connectedness as fundamental to these families, we believe that smart families enable members to sell their shares—without guilt—and still remain members of the family in good standing. Pruning the tree in terms of the family holdings when disinterest develops is important. Individuals should have the ability to withdraw from the economic participation, or then to rejoin if they change their minds. Either way, maintaining the emotional connection to the family is in everyone's interest. It's good business.

Clearly, family ownership is not the same as family membership. For some families it is viewed as an inheritance, in others as a gift, and still yet in others as something to buy. Each family defines how ownership is to be viewed, treated, and transferred to another generation. In this way ownership becomes part of the family legacy and shared value. Ownership issues that are not carefully defined and differentiated from family membership can be destructive to the family legacy. Accommodating for the changing needs of individuals is also an important part ...

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