"The family that sold out is probably rich today, and the family that bought the others' interest is probably working for someone else," Golden says.
Dividing the family business is always more contentious when some children work for the company and some do not. Dribin recalls one family that owned a business with more than $100 million in revenues, where five children worked for the business and five did not. The father bequeathed the business to the five who worked there, and to the others, he gave other assets that he viewed as equal in value. But the children who received those assets thought they were getting the short end of the stick. As often happens in these situations, litigation ensued.
"These were people of wealth who had the ability to pay lawyers lots of money, and it got very nasty-to the point where if all ten children were in a conference room together, five would sit on one side of the table and five would sit on the other, and they would not acknowledge each other's presence," Dribin says.
Eventually, it was settled, but those issues could largely have been minimized by more specific guidelines for determining value. An estate plan could include a mechanism where, say, each party hires his own appraiser, and those appraisers hire a third. The value of the company is then determined by an amalgamation of all three appraisers' assessments.
But even when the value of an interest in a company is determined, there's still the matter of coming up with the cash to buy it. That could be resolved if part of the estate plan involves an insurance policy, the proceeds of which would be used for a buyout, says Douglas Goldstein, an investment advisor with clients in the U.S. and Israel.
In the end, estate professionals say one of the best things parents can do to try to avoid these conflicts is to communicate their estate plans with their children before they die, and to have clear, current documents that spell out how they want their money parceled out.
O'Grady says families will sometimes come to him, and while the parents are in his office, their middle-aged children will stand out in the hallway. Every half hour or so, they will come into the office, but every meeting always turns into a big argument.
"And those are some of the healthiest situations," O'Grady says. "Everyone has a voice. Everyone knows what the plan is. And in the end, they participated in that plan, whether or not mom and dad did it their way."
In most families, you talk to the parents, and they'll say they communicated their plans, and then you talk to the children, and they say their parents mentioned a plan but never showed it to them, and they have no idea what's going to happen when their parents die.
O'Grady knows. It's going to end in tears.