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Family Inc. by Douglas P. McCormick

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CHAPTER 25

Develop a Succession Plan to Groom Your Replacement(s)

Dad has gotten a lot of things right when it comes to money—he saved well, invested well, managed his labor well, and ensured that his legacies (my brother and I) were well educated and capable of managing the family assets. In fact, because of Dad’s mentorship, my brother and I have accumulated wealth that far surpasses his. Yet Dad has failed miserably when it comes to family succession planning. Although I’ve been professionally managing money for 20 years, he is unable to relinquish the leadership role when discussing family finances. He is unable to have a detailed accounting of his own financial circumstances or to promote an environment in which our extended family can openly discuss our financial situation, objectives, and ways to maximize these resources over multiple generations. Because of my father’s rigidity in this area, I am sure that my family has missed out on valuable chances to learn from one another as well as on worthwhile estate planning opportunities. Dad is not alone: Most families miss this opportunity. The conversations can be daunting, delicate, and even embarrassing among family members.

Succession planning for the Family CFO is the most commonly neglected component of most family businesses, yet one of the most important actions that will determine the ability of Family Inc. to thrive over multiple generations. Many successful people work a lifetime to accumulate substantial wealth ...

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