Brett Anderson
12/01/2004
Dividing up a vineyard can become a difficult and tangled legal task in Napa Valley—a circumstance that dramatically impacts estate planning for land owners. “We can’t divide up the land equally, because we have a 160-acre minimum for division of that property,” explains estate attorney David Gaw of Gaw VanMale Smith Myers & Miroglio, a law firm based in California’s wine region. “So we have people who are active in the business owning part of the land and people who are not part of the business owning the other part. That’s a typical problem.”
For this reason, Gaw suggests that his clients involve their children in the estate planning process. Much of the difficulty that wineries experience after a generational transfer results not from the economics of managing the business, but from the conflicts that arise between heirs. Gaw encourages founders to begin the succession discussion while they remain in control of the business, educating their children about the operational and personal challenges of transition. He also recommends choosing the next generation’s leader early on. “Someone has to be the leader,” he says, and the parents must make that initial appointment. “Otherwise, the kids will fight it out.”
Gaw expresses skepticism about having heirs choose the successor from among themselves. “Normally, it does not work. The average businessperson doesn’t involve the children very early. In my experience, the parents have to make the decision to start with, not the children.”
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