Do I Need a Business Succession Plan?

What's next really matters!

Estate planning isn’t only about distributing your house to your heirs. If you own a business, it is also about protecting this most valuable asset. Without proper planning, issues will arise regarding who will take over leadership, whether the business should be sold, or how ownership interests will be managed. Failure to account for these crucial steps can result in the loss of the business or a loss of significant portions of its value.

There are multiple examples of what happens when a powerful family business lacks a clear succession plan: infighting, uncertainty, and instability. HBO’s Succession show dramatized the very real consequences of failing to plan for the future of a business.

Example: I met with a farmer in Southeastern Idaho who had several thousand acres of farmland, double that in pasture land, cattle, heavy equipment, a transportation company, a self-storage company and several other entities. His net worth was in the realm of $30-50 Million Dollars. He had been a widower twice and was currently married to his third wife. He had children from all three marriages, twelve in total. I asked him if he had an estate plan and a business succession plan. His response was that his eldest son ran everything and all the kids were on board with that…and he didn’t need any Will or Trust or anything else! What do you think happened when he passed away? (Hint: It was UGLY!)

Do you really want the Courts to decide? (While everything falls apart?)

In the alternative, remember Giorgio Armani, the founder of the Armani fashion house? He publicly outlined his succession strategy in advance. When he passed in late 2025, at the age of 91, his company continued without a hitch by following his carefully prepared succession plan. Not surprisingly, his life’s work continues to reflect its founding values and vision and will continue forward.

For business owners at every level, the critical planning aspects include:

1.      Succession of Leadership: Identify who should manage the business if you are no longer able to do so, and if possible, clearly establish how to choose successors;

2.      Transfer of Ownership: Decide whether your business should remain in the family, pass to a partner, go public, or be sold;

3.      Alignment with Business Documents: Ensure that estate planning documents (wills, trusts, buy-sell agreements) are consistent with your company’s governing documents; and

4.      Avoiding Conflict and Preserving Value: Provide clear instructions to minimize disputes and maintain business stability for employees, clients, and stakeholders.

Take my example above and apply the planning principles. If that Farmer had specifically structured a succession plan naming his eldest son as the manager of all the businesses and also provided an estate plan carefully providing for his living spouse and each of his descendants, then court intervention would not have been required. The eldest son would have continued to manage the businesses, and the surviving spouse and other beneficiaries would have received a fair proportion of the estate.

Don't cause a "family divorce" by failure to plan.

Sadly, in the absence of clear testamentary intent and documentation, the family immediately splintered into factions, each represented by counsel…and the legal battle ensued. In the end, the surviving spouse received a large chunk of the assets and the children of the former spouses split the remaining “separate” property among themselves. The eldest son did not continue to run the family businesses, and the surviving spouse’s children stood to inherit a disproportionate share of the estate due to nature of the intestacy laws. (The assets were sold or divided at a loss, because the lack of continuity interrupted business operations resulting in a liquidation rather than a full value sale…after all why should the eldest son bother if he was getting roughly one-thirtieth of the assets?)

In conclusion, without a plan, uncertainty prevails. Incorporating business succession into your estate planning opens the door to certainty and protection for both your family and your business.

Curry Andrews, Attorney