Battles over aging parents and their fortunes are becoming increasingly common in wealthy families, with some requiring cognitive assessments for those leading family businesses.
While many families focus on the tax or financial components of wealth transfers, fewer are addressing the question of when an aging parent should give up control.
Here are four tips to make it easier for parents to pass on the reins:
1. Talk about it earlier rather than later:
The biggest mistake that families make is waiting for a crisis like a stroke or a disagreement to discuss succession.
2. The transition should be gradual:
Families should seek a health evaluation sooner rather than later if they see signs of cognitive decline.
3. Treat the wealth creator with respect:
Tact is everything, as this individual often has a strong connection to their role.
4. Get the family on the same page:
When siblings are involved, it's rare for all the adult children to be on the same page.
