Splitting a Family Business Inheritance Between Two Sons at 64
A 64-year-old business owner wrestles with how to fairly divide a family firm between two sons when only one works there.
A 64-year-old entrepreneur with two adult sons is confronting one of the more fraught decisions in estate planning: how to divide ownership of a family business when only one son actively works in the company, according to a reader question published by MarketWatch.
The parent is considering leaving 70% of the business to the son who participates in daily operations, with the remaining 30% going to the son who has no role in the firm. The unequal split reflects a widely recognized tension in succession planning — balancing the operational needs of a going concern against the principle of treating children equitably.
Read more Man, 55, With $4.3M and Brain Tumor Weighs $210K Porsche Purchase →
Adding complexity to the deliberations, the parent expressed reservations about the long-term stability of the non-participating son's marriage. That concern carries financial weight: in many states, inherited business assets can become entangled in divorce proceedings depending on how they are titled and managed, making the structure of any bequest potentially as important as its size.
Estate planning attorneys and financial advisers generally caution that unequal distributions among heirs — even when economically logical — can sow lasting family conflict. Common alternatives include compensating the non-business heir with other assets of equivalent value, establishing buy-sell agreements that allow the operating heir to purchase remaining shares over time, or placing business interests in a trust with carefully drafted terms that limit a spouse's claim in a divorce scenario.
The situation underscores how business succession intersects with family dynamics, marital law, and long-term tax strategy in ways that few owners fully anticipate until late in their careers. Continue reading at MarketWatch.com
