Helping to remove the emotion from succession

When it comes to succession planning in family businesses, most owners expect the hard part to be the numbers: valuations, tax implications, share structures. But ask any adviser who’s been in the room during the real decision-making, and they’ll tell you that the numbers are rarely the problem.

The real challenge, they say, is managing people’s expectations.

According to Alan Murray and Stephen Gahan, tax partners and succession planning experts at Forvis Mazars, the biggest risk factor in succession planning isn’t tax or regulation, it’s emotion.

“In many cases, it can be difficult for the family themselves to decide who is best placed to run the business,” said Murray. “That’s where bringing in a third-party professional is invaluable. Our role is to remove the emotion and evaluate things objectively.”

Murray has seen what happens when families try to tackle succession alone. Competing egos, long-standing sibling rivalries, unequal expectations and blurred boundaries all surface the moment shares and control are on the table. This often leads to poor decision-making, or in some cases no decision being made, ultimately culminating in uncertainty, disharmony and, at worst, litigation. “Our advice is grounded in what’s best for the business, not family politics,” he said.

Many of the businesses Murray and Gahan advise are owner-managed firms: large, private, often cash-rich companies, originally founded by a single entrepreneur or couple and grown over decades. But as those founders near retirement, a familiar dilemma emerges: how to hand over a company built with sweat and sacrifice, when the next generation may not always be aligned or equipped to carry it forward.

“Having a family name on the business does not automatically make someone the most qualified individual to lead the organisation,” said Gahan. “Ownership and governance are fundamentally distinct responsibilities. Leadership should be entrusted to those with the expertise and capability to guide the business forward, rather than being treated as an inherited entitlement.”

That disconnect between ownership and capability is where friction often begins. One family member might be hands-on and passionate about the future of the company; another might live abroad, hold a passive stake, and expect a payout with no involvement. Left unaddressed, that imbalance can lead to serious conflict – or worse, business failure.

To help families avoid those pitfalls, Murray and Gahan say the starting point should be a family charter — a document that outlines the family’s shared values, principles and mutual commitments. Such a charter can set clear expectations around involvement in the business, including roles, ownership and access to income.

“Although it’s not typically a legally binding agreement, it serves as an important framework for how family members choose to work together,” Gahan explained. “It creates clarity, safeguards the business and significantly reduces the risk of disputes down the line.”

A family charter typically sets out the family’s core values, long‑term vision and clear guidelines for participation in the business, including roles, responsibilities and succession planning. It also establishes structured processes for decision‑making and dispute resolution – covering issues such as disagreements, divorce or financial difficulty – and includes safeguards to ensure shares cannot be sold outside the family without first being offered to existing shareholders. Above all, it provides a structured framework that helps manage conflict based on agreed principles rather than emotion.

Murray advises that companies begin this process as early as possible. “Timing is everything. These aren’t conversations you want to be having when the main shareholder is in their 80s. At that stage, family dynamics are more complex and the risks are higher.”

The worst-case scenario is when decisions are left too late, and conversations are shaped more by urgency than intention. That’s when disputes emerge, often with legal consequences. “Being upfront about plans, and involving children in those plans, is the best way to maintain family harmony,” said Murray.

However, while starting to think about the process is recommended, Murray adds a note of caution. “Make sure you don’t give everything away. Retaining some control or income guarantees is vital for your own security, especially when you consider how unpredictable life can be.”

The key benefit of engaging a third-party adviser is neutrality. Unlike a parent or sibling, the adviser doesn’t favour one heir over another. “We’re not emotionally invested,” said Gahan. “We’re there to make sure decisions are made in the best interest of the business and the wider family, not just the loudest voice in the room.”

Their job is part strategist, part facilitator, and often, part peacekeeper. “We speak to everyone, one-on-one and collectively, to bring structure, logic, and impartiality to what can otherwise become an emotional battlefield,” he added.

While many might initially see the role of a company like Forvis Mazars as experts in tax and the practical issues of succession planning, Murray stresses that their work often begins not with tax calculations, but with a very different kind of question: “If there was no taxation in Ireland, what would you like to do with the assets?” The response to that question helps families express what they really want – before the legal and tax structures are built around it.

Sometimes, Murray admits, the best outcome isn’t succession at all, it could be a sale. “For some families, handing over a cheque and removing the emotional ties to the business is far better than watching the next generation mismanage what was once a thriving company,” he said.

In those cases, both Murray and Gahan recommend that business owners turn legacy into liquidity, with clarity, not guilt. “That decision can protect both the founder’s legacy and the children’s future, even if it looks different to what was originally envisioned,” said Gahan. “At the end of the day, most family business owners want to make sure their family is looked after and their business continues to thrive, however that works out.”

Read the full article in the Business Post.