The news story describing this tale of family-business-estate-planning-gone-wrong starts off, "An episode of 'My Three Sons' it wasn't." The writer goes on to describe it as more like Mortal Combat. It is also reminiscent of Shakespeare's King Lear, only with Lear dying at the beginning. This case highlights the dangers of transferring a business to the children of a founder.
Here, the father placed one of his sons in control of the company he founded. After his death, a second son became increasingly "frozen out" of his job and the business. In the end, the lawyers are called in and litigation ensues. The second son was finally awarded $21.8 million in damages. This is not how you want your estate plan to play out.
The rivalry of siblings, the competitiveness of boys, the decades of ill-healed wounds that result from virtually all family relationships makes the transfer of ownership to the second generation of a family fraught with peril.
How you want to plan for the continuation of your family's business is something you need to begin decades before you will need to execute the plan. In this case, one son began working in the business seven years prior to the second one joining. Perhaps he felt this gave him a superior position of authority than that of his brother. The end result was years of expensive litigation.
You should discuss these issues with your estate planning attorney and consider the full range of options. Because every business and every family is different, your plan needs to weigh carefully the temperaments and talents of you children, in relation to the operational needs of your business.
Source: Star Tribune, "Lawsuit over control of family-owned MICO ends with $21.8M award," David Phelps, March 31, 2013