It’s a familiar story that we have seen all too often in our work with families. A senior owner of a family business passes on ownership to the next generation siblings who prior to the death of the parent have no idea of how the ownership will be divided. At the death of the parent the sibling’s different views of what is fair becomes clear and in their dismay and hurt resort to litigation with each other to resolve their sibling rivalry. The parent’s gift thus becomes a gift horse that often tears families apart.
I recently stumbled across a Los Angeles Times obituary of Robert Zildjian who was an heir to the Zildjian cymbal dynasty. In the article, the Times recounts the story of how Zildjian cymbals passed from father to oldest son since its founding in 1623. Avedis Zildjian brought the company to America in the 1920’s and when Avedis died in 1979, he left the company to his two sons in a break with tradition. He gave a controlling interest to Armand who was the oldest (presumably out of their tradition of primogeniture), however Robert was running most of the business. After a legal battle they split the business and Robert formed Sabian, a successful competitor cymbal maker. The article did not comment on the brother’s relationship after the split, but we can imagine what litigation does to a family relationship.
In our experience working with families that share assets we have heard many similar stories that tear families apart. We have learned there is a better way and encourage our clients to include those impacted by their decisions when making them. When parents include the next generation in estate planning and there is a chance to discuss expectations, it can ensure a more smooth transition in the place of sibling discord and litigation.