I have a business client who owns a business and has three children. The largest asset the owner has is the business. One child works within the business and the plans are for them to eventually take over the running of it, while the siblings dabble in the business working part time.
The current will has the business passing from the owner to the spouse. After the spouse passes, then the business would get split three ways with each child owning a third. This is not an efficient way to go, if one gets pissed at the others and sells their shares to an outside party, there could be trouble. Even with a minority position, there could be problems or issues with an outside party, they have rights.
To maintain the business as a family-controlled asset, I have recommended that a “Trust” be created. Then at some point the stock of the business gets titled and transferred to the Trust. The Trust being run by a “Trustee”, first the owner, then possibly the spouse, then a trusted individual.
The Trustee then can add or remove Directors from the Board to ensure that proper governance of the business is in place. With the BOD hiring or firing the CEO to ensure proper management of the company is in place.
If the business produces a significant profit, then dividends can be declared and after the Trust expenses are covered the benefits can be passed to the kids for their benefit.
Ensuring that the business is secure and kept for the benefit of the family. While a Trust is not the best vehicle from a tax standpoint, a Trust would meet all of the other desires of the business owner.