Planning Family-Owned Businesses in Illinois: Avoiding Earthquakes and Landslides while Building Legacies
Created on May 19, 2017
More than half of America's businesses are family-owned but more than 88% of family-owned businesses never make it to the third generation. Given these statistics, invariably, lawyers will encounter a client or potential client who owns an interest in a family business or wants to start such an endeavor. Usually, the reason for starting a family business is to leave a legacy. Yet, knowing this client has little more than a one in ten chance of success, how do you reconcile their legacy dreams with harsh realities? Understanding why the 88% fail is key.
Helping clients plan family businesses is rewarding and challenging. Often, clients with limited resources will use do-it-yourself (DIY) platforms to start their businesses. DIY services provide cost-efficient solutions for entrepreneurs and can foster problems of seismic proportions. Problems occur because, in part, businesses
Additionally, combining family and finance is inherently fraught with challenges because of the nature of the dynamic – family (read emotionally-charged) relationships. Therefore, attorneys who are interested in a practice focused on planning family-owned businesses must be cognizant of the multiple variables that will affect clients' interests and have the requisite legal competency and skills to help clients create a legacy or a profitable and sellable business.
Join Max Elliott in a discussion about planning family-owned businesses. Ms. Elliott is principal and founder of a Chicago-based firm, The Law Offices of Max Elliott. Her firm practices estate planning and wealth preservation for professionals and small business owners. She is also General Counsel for the Bernie Mac Foundation, Inc. and a member of the Chicago Bar Association Trust Law Executive Committee, U.S. Trust Center of Influence on Estate Planning, and American Bar Foundation Fellow. She has presented several times to bar association groups on business succession planning and has worked with several family-owned businesses.
- Identify who your client should be and the ethical issues involved when your client is an entity involving multiple constituent groups
- Determine the requisite competency you should have to serve your client's needs and how to manage those needs when you lack the needed skill set in a certain practice area
- Gain familiarity with statutes governing various legal structures for family-owned businesses
- Grasp the legal dynamics involved in crisis prevention and crisis management
- Discuss how to help your client build a valuable business and successfully transfer their interests
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