Succession Planning for Family Owned Business

calendar icon October 29, 2020

How do you plan a succession for a family business?

One of the primary concerns of families of closely held businesses is how to affect an orderly and affordable succession of the business while providing for the future needs and retirements of the owners. Business succession planning involves understanding many aspects of the family organization in order to properly implement and execute an effective plan. Some of the essential determinations required of a succession plan are:

  • Owner’s and family’s goals and objectives
  • Family’s needs, both immediate and long-term
  • The management team and key non-family member involved in business
  • Determination of value of business
  • Best practices for preparing business for sale/transfer
  • Future ownership and how to best effectuate transfer of ownership
  • Strategies to gain best income tax results
  • Estate tax (transfer tax) impact on overall plan and how to minimize taxes with minimal impact to plan and business

Proper succession planning requires time and commitment by the family to achieve successful results. Once in place, the plan will continue to evolve and adjust with the changes of the family and business. With an effective implemented succession plan, a smooth transition in ownership/management can occur with minimal transfer taxes; the family is provided with future financial security for many generations; a legacy for understanding the family’s overall goals and objectives is mapped out; and family conflicts and disputes are minimized.


  • Discussion of the succession planning process – When, Why and How
  • Determination of financial and non-financial goals and objectives
  • Discussion of the different approaches to succession planning
  • Examples of successful succession strategies and not so successful plans