Business succession planning for family-owned businesses requires solving a myriad of thorny issues and potential conflicts to address a family's chief question: how will the family business, which may represent the lion's share of the family wealth, be governed, managed and accessed by future generations?

Consider the below approaches to some common governance, tax and technical hurdles families face when planning how to pass the business to the next generation. (A topic for another article would be the hurdles families face if they wish to pass the business to charities, instead!)

Liquidity Planning for Estate Tax Liability

Payment of the estate tax liability can be a challenge for estates of family business owners. Generally, the estimated estate tax payment (a hefty 40% bill on assets above the exemption) is due nine months after the owner's death. If a significant portion of the decedent's estate is comprised of family business interests, then the estate may have significant liquidity concerns, requiring a fire sale or leveraging the business to meet the liability.