When you’ve worked hard to build a successful business, your company becomes your legacy to your family and community. Eventually, the day will come when you no longer run the business, whether due to retirement, disability, or death.
Have you prepared for who in your family will take over your business? Developing a business succession plan requires careful thought and attention to detail to ensure a smooth leadership transition while minimizing cost and lost business opportunities.
When you need help planning for what happens to your business after your retirement or death, turn to Amoruso & Amoruso LLP. Our team has nearly 60 years of combined legal experience helping clients plan for their future and the unexpected. As part of our signature comprehensive estate planning package, we bring key elements of estate planning, elder law, long-term care, and other areas — including business succession — into a strategy that’s tailored to your individual needs.
Contact us today to learn more about your legal options from a knowledgeable New York business succession planning lawyer.
What Happens If I Don’t Have a Business Succession Plan in Place?
The sudden retirement, disability, or death of a business founder and owner can have devastating consequences for a small business or closely held corporation. For businesses that rely on the founder/owner for leadership, their departure can abruptly halt operations. Company managers may leave important decisions unresolved until a new leader takes over. Employee or inter-family succession conflicts may flare up. And work may go unfinished without leadership at the top to keep everyone on track.
The loss of a business founder can also jeopardize customer/supplier relationships and diminish the company’s goodwill. Many small business owners build personal connections with customers or clients. Those clients may not want to continue doing business with the company without the owner at the helm unless they feel assured that business will continue as usual.
Finally, leadership transitions can take time if the company lacks a clear business succession plan. A business may miss critical growth opportunities while bringing new leadership — even if it’s a family member who’s been a part of the company for years — up to speed. Competitors may also seize the company’s weakness as an opportunity to poach customers and employees.
Without a business succession plan, you run the risk that your company won’t survive your departure due to declining performance or the need to accept an acquisition offer. The lack of a succession plan can jeopardize your life’s work and the wealth you’ve built for your family.
Can I Coordinate My Business Succession Plan with My Estate Plan?
A successful business succession plan should work hand in hand with your estate plan.
Your estate plan should address what happens to your ownership interest if you suddenly pass away while still owning and controlling the business. For example, your estate plan may ensure your ownership interest doesn’t pass through probate. Probate can involve lengthy court proceedings, particularly when dealing with complex assets like business interests. Tying up your ownership interest in probate can unnecessarily delay the succession process for your business.
Whether you intend to sell your business interest after your death or pass it to a family member, partner, or key employee, your estate plan should consider succession tax implications. Estate planning can help minimize your family and heirs’ estate and inheritance tax liabilities. Depending on the details of your succession plan, coordinating succession with your estate plan may also help avoid tax liabilities for the business.
At Amoruso & Amoruso LLP, when we put together a comprehensive estate plan, we consider these matters and develop innovative solutions for you.