ILL USTRATIONS: PUSHART Family bankers share how they successfully transfer their businesses from one generation to the next-and the potential pitfalls to avoid in the process. By Katie Kuehner-Hebert very bank has succession challenges, but the transfer of a familyrun institution can be especially daunting. Families must not give undue preference to would-be successors above other employees and must be sure that younger generations have the proper training to one day take the reins. Moreover, issues between family members can be tricky, particularly over ownership rights and the overall strategic direction of the institution. But with upfront communication, the right counsel and a commitment to mutual respect, many family-run banks have thrived for generations. Emily Hofer is chief fi nancial offi cer at $154 million-asset Merchants State Bank in Freeman, S.D., where she has worked as CFO since 2005. Hofer represents the third generation to own and manage the bank. Her grandfather, Harris L. Hofer, purchased Merchants State in 1968 and ran it for years with independentbanker.org ICBA IndependentBanker 35http://www.qmags.com/clickthrough.asp?url=www.independentbanker.org&id=20378&adid=P35E1