Set down a family constitution and provide for conflict mediation: Businesses are often started with great ideas but put in place with very limited planning and even fewer ground rules. This leads to unmet expectations, anger and frustration among various family stakeholders. With family involvement, the potential for conflict also increases exponentially. Mediation can help all stakeholders have a healthy ongoing relationship.
Create a sound succession plan: This is important because it gives the family a guide for conducting business. Without a succession plan, the fate of the business is uncertain and could be left in the hands of a court.
Set up a family trust: This is one of the most effective and internationally employed tools for succession planning. It helps the settler segregate management and control from economic interest by clearly defining the same in the trust deed.
Finalise your will: Writing a will is a commonly used option for managing family wealth. But since it takes effect on the demise of the testater, it is more susceptible to challenges as compared with a living trust.
Chalk out leadership roles: History shows that family wealth gets disintegrated in two to three generations purely because of internal conflicts rather than external events or pressure. To preserve it, a predefined approach instead of ambiguous ones always helps. Hence, it is prudent to clearly define roles during the lifetime of the head of the family.