Dear Retirement Dilemma,
So, here’s the lowdown: My old man is finally calling it quits, and I’m here with my sis, trying to figure out how to divide his riches. Pops is clueless on how to split the goods between us, and that’s where you come in.
Dad’s a 65-year-old self-made businessman, raking in a sweet $140k a year. He’s got his hands in a few pots: a fat $1MM in cash, a business bringing in $3.1MM annually, some swanky properties worth $2.4MM, and a personal crib valued at $2.5MM with a bit of debt. Oh, and don’t forget the $500k chilling in his bank account.
I’m the son who’s been grinding away at the family business, handling everything from client management to property upkeep, pulling in a cool $200k yearly. Then there’s my sister, a new mom who ain’t keen on joining the family business but expects her fair share. She chips in a bit here and there but pockets a hefty $110k salary for some light work.
Dad’s itching to retire and pass on his legacy, but he’s stuck on how to divvy up the goods between us. How do you split up properties and businesses when the workload ain’t equal?
What’s a fair percentage for each of us in the business? How do you even go about dividing up ownership and properties fairly? If you’ve been in this spot, how did you navigate the tricky waters? I’m not just after financial advice but some wisdom on handling family dynamics too.
Appreciate your help, mate.
Cheers,
Willy the Worried Son
Response from HELP ME RETIRE:
Hello There,
Congratulations on your dad’s upcoming retirement! It’s great to hear that he wants to pass on his hard work to his kids and ensure a smooth transition. The situation you described is indeed sensitive and complex, but it’s commendable that your dad wants to address it proactively. In terms of dividing assets between you and your sister, a practical approach might be to consider the contributions each of you has made to the business. Your dad could potentially consider a split that reflects the value each of you has added to the business.
Given that you handle the day-to-day operations and bring in new clients, it seems reasonable for you to have a larger stake in the business. Your sister, who does not work in the business but is a homeowner and a new mom, could still receive a fair share based on her contributions. One approach could be to allocate a higher percentage of the business to you, considering your active involvement, while still ensuring that your sister receives a meaningful portion that reflects her role in the family dynamic.
When it comes to dividing business ownership and real estate, it may be beneficial to involve a financial advisor or a mediator who specializes in family business transitions. They can provide valuable insight and guidance on structuring a fair and balanced distribution of assets, taking into account the unique circumstances of your family.
Ultimately, open communication and transparency will be key in navigating this process. It’s important for your dad to have candid conversations with both you and your sister about his intentions and the rationale behind his decisions. By approaching this issue with respect, empathy, and a focus on fairness, you can hopefully reach a solution that benefits all parties involved.
Best of luck as you work through this challenging situation, and I hope you find a resolution that satisfies everyone’s needs and concerns.
Warm regards,
HELP ME RETIRE
