Attorney
A business succession plan addresses what should happen when an owner retires, becomes unable to work or dies. For a family business, it also helps connect the owner’s personal estate plan with the needs of employees, co-owners and the next generation.
Begin with your goals
Decide whether you hope to transfer the business to family, sell to employees or co-owners, find an outside buyer or eventually wind it down. Consider the income you will need, the people you want to provide for and the role you would like to retain during a transition.
Those goals may change as the business and family develop. A useful plan provides direction while allowing appropriate review. It should also address an unexpected interruption, not only a carefully scheduled retirement.
Separate ownership from management
The person best suited to run the business may not be the person who should receive all of its financial value. Some family members may work in the company while others do not. Ownership rights, voting rights, compensation and management authority deserve separate consideration.
Evaluate potential successors by their ability, interest and willingness to prepare. A family member, experienced employee or outside manager may be appropriate. Identify backups for the owner and other key people, and discuss the proposed roles before relying on them.
Address valuation and funding
A buy-sell agreement may be useful when ownership could change through death, disability, retirement or another defined event. It should fit the actual ownership structure and address how value will be determined, who must or may purchase, and how the price will be paid.
Insurance, installment payments or other financing may help, but funding assumptions should be tested. A purchase obligation without a practical source of funds can create difficulty for both the business and the departing owner’s family. Not every business needs the same type of agreement.
Coordinate the legal and tax documents
Review the entity’s governing documents, transfer restrictions, ownership records, estate documents and relevant contracts together. A will or trust should not promise a transfer that conflicts with an enforceable business agreement. Tax consequences depend on the form and timing of the transaction and should be evaluated with the accountant and other advisers.
Prepare the transition
Develop a realistic schedule for training, mentoring, introductions and transfer of responsibilities. Explain who can sign, access essential records, maintain payroll and speak with clients or vendors if the owner is temporarily unavailable. Decide how and when employees and family members will be informed.
We help business owners connect these practical decisions with a coordinated business succession plan. The aim is to preserve options and make the next stage manageable for the people who depend on the business.
Updated October 26, 2026.