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Addressing Unfairness in Business Transition Planning

Submitted by John Brown on Fri, 11/29/2019 - 8:00am
Parallel train tracks running through a green countryside with bushes on the sides of the tracks

A common hurdle that business owners confront in their careers is addressing fairness in their business transition planning. As owners determine what they want to do with their future ownership and plan for future success, they often find that people outside of the business want to have a say in the planning. Most often, these “outsiders” are actually close family members. Consider the story of a Thanksgiving gone awry because of perceived unfairness in planning.

A business owner, Henry, thought he was in a good spot. A few weeks before Thanksgiving, he and his Exit Planning Advisor, John, had finalized some important business transition planning documents. They created incentive plans to keep several key employees with the company as Henry began to transition his ownership. They also decided to begin gifting company stock to Henry’s daughter, Clara, who had played a big role in increasing the company’s value over the last 10 years.

The day after Thanksgiving, Henry called John in a rage. He demanded that they meet first thing the following Monday. When they met, Henry began telling John why he didn’t feel like he had much to be thankful for.

“I spent my Thanksgiving getting yelled at by my kids. Apparently, Clara bought her kids expensive electronics to bring to dinner with them. When her brother George and sister Denise asked her how she could afford those gifts, Clara told them about the stock gift. George and Denise demanded to know why they weren’t getting money to buy their kids something like that. I’ve spent the weekend sleeping on the couch because of this. We need to undo this gift.”

What went wrong, and how could anyone have anticipated what happened? Let’s look at a couple ways Henry’s advisor could have addressed the perception of unfairness before it came to a head.

Questions, questions, questions

Like most problems that arise in business transition planning, Henry’s problems stemmed from his advisor failing to ask the right questions. When John first started working with Henry, he noticed that Henry was domineering and confident in his decisions. So, John began asking Henry fewer questions as they got deeper into the planning process. Henry seemed to know what he wanted, and up to this point, things had worked well.

Working in the business owner’s interest means knowing which questions to ask and when to ask them, regardless of how confident business owners seem.

Knowing which questions to ask can be challenging, especially when those questions relate to personal family issues. BEI provides advisors with effective tools to guide advisors toward asking the right questions of business owners.



  • Business transition planning can be chock-full of perceived unfairness. Advisors must point out blind spots in business owners’ planning intentions and then help owners address those blind spots.
  • The best way to get ahead of perceived unfairness is to ask business owners the right questions. BEI provides advisors with tools and training to not only ask the right questions but also address the answers owners give effectively.
  • Bringing the owner’s spouse or partner into the planning conversation early on is another effective strategy. BEI provides advisors with tools, strategies, and strategic alliances to thread the needle between doing what’s best for the owner’s business and the owner’s family interests.

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