EP Wealth’s Tyler Petersen, CFP®, shares how business-owning families can address conflicts around succession, roles in the company, compensation, and long-term direction.
Conflict in family businesses can show up in ways that are somewhat expected, such as disagreements over who’s in charge, when leadership should change, or how roles are divided among family members. But just as often, significant rifts emerge around values and the overall vision for where the business is headed. If these divisions aren’t addressed, they can lead to real consequences, including families losing control of the business, assets being sold off, or the estate being divided in ways that weren’t intended.
From my work as a CERTIFIED FINANCIAL PLANNER™ with families over the years, I’ve found that families that make good business decisions in the short term but don’t focus on family unity are more likely to see the business side eventually start to break down. Families that do prioritize unity often end up with stronger long-term outcomes, both in terms of business value and how the estate is preserved across generations.
Widely cited research has shown that roughly 70% of family wealth doesn’t transfer successfully to the next generation. . Conflict and breakdowns in communication play a big role in that.
Here are a few practices that I’ve seen help families address those challenges:
While every family has its own story, there are several areas where conflict tends to show up consistently.
Succession is probably one of the most common sources of tension. Most people assume the conflict is about who will take over. That definitely happens—but I’ve also often seen conflict centered around when the transition should happen. In some families, it’s already been decided who the next CEO or President will be, and the next generation feels ready to step in while the older generation isn’t quite ready to step back. That mismatch in timing creates friction.
In large families, there may be multiple siblings or relatives who want to be involved in the business. Without clear job descriptions or role expectations, confusion builds, especially if people are stepping in because they’re family, not necessarily because of a business process. Over time, that can potentially lead to duplicated efforts, disagreements, and strained relationships.
Another challenge may come up when you have some family members working full-time in the business and others who aren’t involved day-to-day. If compensation doesn’t reflect those differences in participation, or if everyone is compensated equally regardless of involvement, it can create resentment and conflict.
In some cases, especially when a family leader passes away unexpectedly, there’s no clear decision-making structure in place. That can leave younger family members trying to figure out who has the final say. When no one knows who’s in charge, it’s hard to move forward.
I’ve seen plenty of situations where family members don’t get along personally but are expected to collaborate on major business decisions. Those interpersonal dynamics—whether it’s between siblings or in-laws—can spill over into operations and stall progress.
This one gets overlooked sometimes, but it’s important: Who counts as “family” in a family-owned business? Are in-laws included in decision-making? What about extended relatives? And perhaps just as importantly, how do you recognize and treat loyal non-family employees, those who’ve been instrumental in building the business but aren’t owners?
I’ve seen a number of families wrestle with this. They want to take care of long-term employees who aren’t technically family, but they’re not always sure how to do that in a way that feels fair and aligned with their values.
Different generations often bring different values and priorities. One generation may be focused on preserving wealth and operating conservatively, while the next is more growth-minded or interested in impact investing. These differences aren’t always dealbreakers, but without a shared framework, they can lead to misunderstandings or conflict.
This shows up in estate planning, buyouts, and share structures. For example, one family member may be actively involved in running the business, while another is more removed. Should they own the same percentage? What happens if someone wants out, or wants a valuation that’s different from what others think is reasonable?
Equalizing the estate while recognizing differences in involvement isn’t easy, and can highlight serious differences in what each person believes they’ve earned or are entitled to receive.
The main risk is losing control of the business and the assets, and losing family unity in the process. When conflicts aren’t addressed, they tend to show up in these ways:
Over time, those rifts can lead to families losing trust in each other and eventually even losing the business. That 70% failure rate in wealth transfer signals that these risks all too often have become reality.
There’s no one-size-fits-all solution, but there are strategies that consistently support more constructive conversations and outcomes.
We’ve seen real benefits when families bring in an outside advisor or coach—someone who isn’t a family member, but who can help guide the conversation. These facilitators can potentially help reduce tension, encourage participation, and make sure different voices are heard.
It’s important that people feel like they can speak up. That starts with creating a space where there isn’t just one person dictating the agenda or outcome. In families with strong personalities—and most families have them—inviting different perspectives and encouraging disagreement in a constructive way may help lead to better decisions.
A structured meeting doesn’t just mean blocking off a calendar slot. It means creating an environment where the whole family has a chance to participate, share views, and hear what matters to others. It’s a way to reduce confusion and build shared direction over time.
One thing I recommend to families is identifying individual values and then working together to build a shared family wealth purpose statement. That statement can serve as a kind of compass for future decisions about the business, the estate, and other family matters.
I’ve found that involving younger family members in philanthropic decisions, whether through a foundation or a donor-advised fund, is a great way to teach values, introduce responsibility, and start conversations that carry into other areas of the business and estate.
Family meetings, on their own, aren’t the answer. In fact, if they’re not set up well, they can actually cause more problems. The most common issue I see is when a family leader uses the meeting as a platform to dictate their plan without involving others. Over time, that may create resentment. People might stop showing up, or they might stop speaking up.
Here are some of the practices I’ve seen work better:
One thing I’ve noticed is that the process of creating a wealth mission statement can help create unity. It also becomes a helpful bridge between the family and their outside advisors. Without that kind of guide, estate plans and investment strategies often default to three things: minimizing taxes, growing wealth, and naming who’s in charge. While these are all important, none of them, by themselves, address the root causes of the 70% failure rate in wealth transfer.
At EP Wealth, our business planning services support families by helping put a structure in place that makes these conversations more manageable. That includes:
We bring together five areas—estate planning, tax strategy, investment planning, philanthropy, and family governance—into an integrated process. That way, decisions aren’t made in silos. They’re connected by what the family actually values.
In my conversations with families, I still get questions about saving on taxes or how their investments are performing. That hasn’t changed. But more and more, people are focused on: “What impact is this wealth going to have on my kids?”
They’re thinking about the next generation and how to pass down values, not just assets. That’s where real long-term success comes from, not just in the numbers, but in the relationships that make those outcomes possible.
Our business planning services are here to support you. Contact an advisor at EP Wealth to get started.
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