Family Owned Businesses Must Diversify to Thrive across Generations, Says Hemenway & Barnes

BOSTON--(BUSINESS WIRE)--Hemenway & Barnes, one of Boston’s most storied legal and fiduciary firms, today issued a discussion paper on the impact of implementing a diversified model for family owned businesses.

“In the U.S., a cultural focus on the individual has created a mindset of dogged persistence and entrepreneurialism that serves as the foundation for a great number of successful businesses”

The paper, "Fueling the Family Enterprise: what family businesses gain by embracing diversification," asserts that family businesses can better tackle multi-generational goals by creating a holding group or private equity firm with a diversified portfolio of companies. The results are seen through more opportunities for succession, estate tax planning, and the ability to grow a legacy for centuries.

“In the U.S., a cultural focus on the individual has created a mindset of dogged persistence and entrepreneurialism that serves as the foundation for a great number of successful businesses,” writes Fred Marx, partner at Hemenway & Barnes and author of the paper. “Marrying such individualism with a diversified Family Enterprise model helps create an inclusive environment for relatives, provides the most effective succession and estate planning opportunities, and solidifies the future of heirs for generations to come.”

Mr. Marx notes that the holding company structure benefits family owned businesses through:

Estate planning, by presenting a number of options to create liquidity through a sale of selected assets.
Business succession, by allowing the senior generation elders to move from an operating company into positions elsewhere in the holding company, opening a pathway for the younger generation to take charge.
Group dynamics, by creating distance between relatives and managers across the Enterprise.

For more information, please visit Hemenway & Barnes’ News and Resources page or download the paper directly here.

About Hemenway & Barnes

Based in Boston, Hemenway & Barnes LLP has served for 150 years as trusted counsel to the region’s high net worth families, businesses, and nonprofit organizations. The firm is uniquely designed as a home for legal and financial expertise, with a focus on providing each client with services that are specifically tailored and results-oriented. Areas of expertise include estate planning, litigation, corporate work, and real estate. Its affiliate, Hemenway Trust Company LLC, is a New Hampshire based, private trust company offering a full range of wealth advisory and management services. For more information, visit www.hembar.com.