By Maureen T. McKay
One upon a time, I had a client named Jack, whose mother had granted him a Power of Attorney (“POA”). Some years later, Mom’s capacity became questionable. Jack’s sister, Jill, wanted to have Mom create a new POA in her favour that would terminate Jack’s POA. The future of a family business hung in the balance. Someone was likely to come tumbling down the hill. The dispute made quite a few family members unhappy, and quite a few lawyers a lot of money.
“A dysfunctional family is any family with more than one person in it.” ~ Mary Karr
In an earlier article, I wrote about taking responsibility for planning for the succession of our personal and business affairs and threatened that Maureen McKay and I would write subsequent articles to explore this topic.
My wife, Maureen McKay, is the love of my life, so it is only natural that I want to be sure that she will be well taken care of when I pop off. And since I am now 70 years old and she is quite a bit younger than I am, it only makes sense that I would try to put some things in order to make it easier for her to go shopping when I nod off for the last time.
Spouses often both own shares in a corporation that operates a family business, sometimes because they are both active participants in the business, and sometimes as part of an income splitting or creditor protection plan.
Leo Tolstoy said, “happy families are all alike; every unhappy family is unhappy in its own way.”
Mary Karr wrote: “a dysfunctional family is any family with more than one person in it.”
I have many thoughts about family business succession. Here are a few of them:
by Maureen T. McKay and Murray Gottheil
“Happy families are all alike; every unhappy family is unhappy in its own way.”
Leo Tolstoy, Anna Karenina
Introduction
Resolving a dispute among shareholders of a family-owned corporation is entirely different from resolving a dispute among shareholders who are not related. Professional advisors who want to help resolve disputes in a family-owned business must understand not only that a family-owned business is different and how it is different, but more importantly, must adjust their approach to take those differences into account.