When asked whether or not someone in their employ could run their business, 79 percent of owners of private construction firms said no one could. This response shows that most construction companies would be in serious trouble if the owner suddenly died or was disabled. Even though 65 percent of contractors' families inherit the business, only one of five construction businesses survives into the next generation. Don't be tempted to keep the business alive just in case the kids want to be contractors someday. That only makes sense if the family members are actively managing the firm. If a family member does desire to run the business, treat the kids equitably and fairly, but not necessarily equally. Arrange the ownership so the business has the best chance of survival.
When arranging for ownership transfer after your death, realize that maybe your spouse would be better off with cash. From an economic viewpoint, construction companies are often worth more dead than alive. Your business can be sold to the employees or to a third party. Selling to employees is usually the preferred choice, but they often do not have the money to buy the company. Liquidation, therefore, is often a good alternative. Have a "shut down" plan ready in case it is needed.