Continuing the Family Business After Its Founder’s Passing: The Austen Family Legacy

To best enjoy this post, please be sure to first read A Family History of the Austens

The adult children of Jack Austen – Kate, Charlie, and Claire – are gathering a few months after their father’s passing to remember him and discuss what to do with the family business, Oceanic Real Estate, LLC.    

Each child inherited an equal interest in that business, much to Kate’s dismay as she anticipated being the sole heir. While Kate is independently evaluating whether to legally challenge her siblings’ rights to the business – see “What To Do if Estate Assets Need To Be Managed During Litigation: Examining the Austen Family” – she is setting that aside, for the moment, in the interest of considering what is best for her father’s legacy.   

Claire, the youngest sibling, has no interest in operating the family business; it simply holds too many overwhelming memories. Claire wants to sell her interest to her siblings.    

Kate and Jack are both interested in continuing their father’s legacy. They also care deeply about Claire and want to make sure she has all she needs. However, none of the children have a real sense of the exact value of the business or even how to evaluate it.

While Jack is focused on continuing the business the way it has been operating, Kate has hopes to expand the business beyond its current focus on brick and mortar property management/rentals. Kate has ideas for a new app that she hopes will become even bigger than Airbnb.    

After talking for a while, Kate, Charlie, and Claire realize they may need help sorting out these issues. They reach out to an attorney, Iris, who has helped their father with several business issues in the past, to see what she recommends.

Iris quickly realizes that the siblings may have conflicting goals and interests. She recommends that each sibling should retain separate legal counsel to get specific legal advice concerning their individual goals. However, Iris does pass on some thoughts and friendly recommendations:

  • There are many financial consultants whose core focus is business valuation; some even specialize in certain industries and fields, like real estate. Iris provides the siblings with some referrals so they can explore having an independent evaluation performed to assist with setting a value on Claire’s interest in the business.   
  • As Claire has certain disabilities that could impact her decision-making, Iris provides her with a referral to a family law attorney who may be well-suited to represent Claire in a buy-out. It just so happens the referral was for the same attorney that Claire has already been speaking with about potential conservatorship issues – see “Guardianships and Conservatorships: Examining the Austen Family.
  • Iris also suggests that Kate may want to start considering intellectual property issues associated with her proposed venture and recommends she speak with an intellectual property attorney. Kate’s description of her new venture suggests she may have ideas worthy of patent or trade secret protection – particularly surrounding the app – and that Kate may want to protect the new brand she hopes to launch for her venture through filing a trademark application. In addition, Kate may want to protect certain business documents and/or software with copyright protection. Iris also encouraged Kate to speak with an intellectual property attorney to help ensure the new venture is not at risk of infringing other people’s intellectual property, which can lead to a lawsuit.     
  • Iris can tell that Kate and Jack are not only at odds over the direction of the family business, but also over who will be in control. Iris suggests to Kate and Jack that they may want to consider having a mediation to, hopefully, sort out any remaining differences and plot a course forward in the least combative way possible under the circumstances. She provides the names of some mediators who handle similar issues.   

The siblings agree to explore these options and meet again to discuss possible paths forward.

***

Many people face obstacles similar to those faced by the Austen family. If you are one such person, you are not alone – both because others have survived such ordeals and because advisors are here to assist.    

Financial professionals can help guide you through any number of obstacles including valuing your business, projecting an estimate of future profits, understanding your accounting and inventory, resolving tax issues, or even providing advice on how you can improve your business.   

And there are many different types of attorneys available to help navigate legal issues. If a brand or technology is critical to the success of your company or new venture, consider speaking with an intellectual property attorney to make sure you are not losing an opportunity to maximize your value or prevent competitors from entering your market.    


Eric G. J. Kaviar is a partner in the firm’s Intellectual Property and Business Litigation groups, specializing in the fields of patent, trade secret, copyright and trademark law. He is skilled at successfully resolving intellectual property and other commercial disputes, bringing creative solutions to complex problems in ways that align with his clients’ business needs and goals.

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