Learn how to create a business succession plan that supports long-term goals, minimizes disruption, and reflects the legacy you’ve worked to build.

Building Passive Income Streams for Retirement

For high-net-worth business owners, succession planning is a pivotal step in shaping what comes next for your business, your family, and the wealth you’ve built. Whether you intend to keep the company in the family, transition to a trusted executive team, or prepare for a strategic sale, planning ahead can help create continuity and preserve the values you’ve embedded in the organization.

A well-structured succession plan may also help prepare your successors, address tax considerations, and potentially reduce the risk of disruption during unexpected transitions.

Some key steps in building a succession plan:

• Define long-term ownership and leadership goals
• Identify and prepare successors
• Structure the business for continuity and transfer
• Assess business valuation and liquidity needs
• Evaluate estate and tax implications

• Establish family governance structures

• Communicate the plan with key stakeholders
• Review and update the plan regularly

Define the Legacy You Want to Preserve

Succession planning starts with clarity around your long-term goals. For some, this may include keeping the business in the family or mentoring the next generation of leadership. Others may be focused on preparing the company for sale or building a structure that allows for a phased transition over time.

Consider questions such as:

• Do you want the business to remain family-owned, or transition to outside leadership?
• Are there values, charitable commitments, or community relationships you want to maintain?
• How does the business fit into your broader retirement and estate planning strategy?

These early conversations can shape the path you take—and help identify the right structures to support that vision.

Identifying and Preparing the Right Successor

Choosing a successor is both a practical and emotional decision. You may be evaluating family members, internal executives, or external buyers. Regardless of the path, readiness is key.

Factors to assess:

• Leadership capability and alignment with your vision
• Willingness and readiness to take on the role
• Experience with the financial, legal, and operational aspects of the business
• Support systems needed to help them succeed

If your intended successor is a family member, consider how you’ll introduce them to the team and transition responsibilities. If they’re external, succession may involve a more formal vetting and onboarding process.

Structuring the Business for Continuity

A succession plan often involves preparing the company structurally for future change. This can include updating legal documents, simplifying ownership, and formalizing internal systems.

Common elements to review:

• Buy-sell agreements, especially if ownership is shared
• Bylaws and operating agreements that outline voting rights or transfer provisions
• Establishing a board of directors or advisory board, if not already in place
• Documenting operational workflows and knowledge transfer plans

These steps can help make the business more transferable and easier to manage during and after the transition.

Addressing Tax and Estate Planning Considerations

Transferring a business can have significant tax implications—especially for those with substantial ownership stakes. Succession planning is often coordinated with estate and gift strategies to help manage potential tax exposure.

Tools that may be considered:

• Gifting shares over time using the annual exclusion or lifetime exemption
• Grantor Retained Annuity Trusts (GRATs) or Spousal Lifetime Access Trusts (SLATs)
• Use of family limited partnerships or LLCs to manage ownership and control
• Reviewing how the business is titled within your estate plan

Work with professionals to align your business transition with your broader estate goals and to evaluate how any transfer may be treated for tax purposes.

Valuation and Liquidity Planning

Establishing an accurate valuation is central to succession planning, whether you’re transferring shares, structuring a buyout, or preparing for sale.

Considerations include:

• Engaging a qualified business appraiser to assess fair market value
• Understanding the impact of discounts (e.g., lack of marketability or control)
• Planning for liquidity needs to fund estate taxes or equalize gifts among heirs
• Using life insurance or installment sale structures to create liquidity if needed

Valuation also affects your ability to gift shares, structure compensation, and prepare successors financially.

Family Governance and Communication

For family-owned businesses, succession planning benefits from strong governance. Even when the plan is clear, managing expectations and communication can help support smoother transitions and reduce conflict.

Consider formalizing:

• A family mission statement or constitution
• Roles and responsibilities for family members in and outside the business
• Regular family meetings or councils to discuss business updates and shared goals
• Rules for joining, leaving, or selling interests in the business

These structures provide transparency and may help foster a collaborative decision-making environment—especially across generations.

Planning for the Unexpected

While succession is ideally planned well in advance, unexpected events can accelerate the timeline. Illness, incapacity, or sudden death can place a strain on the business and family.

Prepare by:

• Naming interim successors or establishing emergency leadership roles
• Reviewing life and disability insurance policies for income or liquidity support
• Keeping critical contacts and operational instructions accessible
• Creating a continuity file or digital vault with legal, financial, and business documents

Building these contingencies into your plan adds resilience—even if you're not ready to fully step away yet.

Communicating the Plan

A well-crafted succession plan still needs to be communicated clearly to those it affects. This may include family members, key employees, business partners, or external advisors.

Suggestions for rollout:

• Share the plan in phases and document key decisions
• Use one-on-one conversations to build alignment before public announcements
• Update the plan regularly and communicate changes transparently

Open dialogue should be intended to help preserve trust, retain top talent, and set clear expectations for the future.

How EP Wealth Supports Business Owners in Succession Planning

Succession planning involves more than drafting a will or transferring shares—it’s about shaping the next chapter of your life and your business. At EP Wealth, we work with business owners to integrate succession planning into a broader financial picture. This includes:

• Coordinating with business and estate attorneys, tax professionals, and valuation experts
• Evaluating gifting, liquidity, and transition strategies
• Addressing ownership structures, trust planning, and legacy objectives
• Supporting clients through exit strategies, business sales, or family transitions

Whether you’re early in the planning process or approaching a milestone decision, our business planning services are here to support you. Contact an advisor at EP Wealth to get started.

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