Failing to plan for business succession—and adequately train successors—is the reason only approximately one-third of family businesses successfully transfer from one generation to the next. Reasons for this failure are legion:

• No one can do it as well. (At some point, "they" will have to.)
• It’s not time. (When will it be?)
• I’m too busy running the business. (Truly successful business leaders identify and train a successor.)

The question of how to get your dad to recognize the need for this discussion is a common dilemma, but the fact that you acknowledge the need for this discussion is a very good first step. Perhaps your mother or a trusted advisor can address the issue with him. You and your siblings may have to join together to raise the issue in a family setting. Your father won’t suddenly find himself without something to do. Rather, successful successions are generally staged over a number of years, with built-in contingencies in the event of unusual circumstances.

However you choose to initiate the process, I urge you to begin your course of action within the coming year. Otherwise, the business will likely fail to be among the very few organizations that are passed successfully to the third generation.
Edward F. Koren, Holland & Knight, Tampa

The old adage "one does not plan to fail, but fails to plan" holds especially true in succession planning with a family business. Your question raises many issues that you should examine. Does your father have a testamentary estate plan? Does the estate plan take into account the family business? If so, what are the implications for succession planning and family finances? Have the children been involved in the business? Who are the trusted advisors involved with the planning? The answers to these questions are essential background to any succession-plan discussion.

Dialogue about the succession plan depends on the family relationships. In an open relationship, you can ask direct questions about the impact of your dad retiring (or passing away). The best practice is to have a succession plan in place that is fully integrated with an estate plan. This should address disposition of assets and estate tax minimization through lifetime gift and sale strategies, all of which are consistent with the family’s ownership and economic objectives. The plan can evolve over time, as you may need to revise it.

Although in the past it was uncommon for parents to discuss testamentary plans, today it is becoming an accepted and proactive practice. My experience has been that if a family can gather to discuss the disposition of assets, then a smooth transition can take place during your dad’s life.
Domingo P. Such III, McDermott Will & Emery, Chicago

There should be succession plans in place for your family business at this point. Your situation is a classic example of a succession-planning problem in a family-held business.

The real discussion lies with the siblings. You must discuss (openly and honestly) who has the time, talent, desire and interest in succeeding your father. Leaving the decision to your father is unfair. The optimal approach is for the siblings to work together to create a managerial system. In this approach, the group will choose the most appropriate successor. The objective is for everyone to articulate his or her value as both a member of the family and as a member of the business. Siblings should be allowed to express their desire to grow into the shareholder and business-owner they can be. Once you build your team and design a succession plan, you can approach your father. At the end of the day, though time consuming and uncomfortable, this detailed planning increases the likelihood of the family business succeeding.
James M. Harris III, The Harris Group, Merrill Lynch, Albany, Ga.