Success in Succession Planning

Assessing Succession Planning in a Business 

  1. DEATH: What happens to the business if the owner passes away suddenly?

  2. DISABILITY: How will the business function if the owner becomes incapacitated?

  3. DIVORCE: Could a divorce impact business ownership?

  4. DISAGREEMENT: Are there internal conflicts that could threaten the business?

  5. DISTRESS: How would a lawsuit against an owner or economic or personal stress affect the business? 

The above are the main reasons for a detailed Operating Agreement that addresses succession planning. 

The following are some important legal concerns…

  • Management Succession

  • Resolving Deadlocks

  • Membership/Ownership Succession (especially in family businesses)

  • Taxation and Finance 

Key financial indicators to look for include the following…

  • REVENUE TRENDS: Are sales increasing, stable, or declining?

  • PROFIT MARGINS: Is the business maintaining healthy profit margins?

  • DEBT LEVELS: How leveraged is the business?

  • CASH FLOW: Is there sufficient cash flow to support ongoing operations? 

Document Production 

The production of useful and accurate documents is important for both estate planning and business succession planning. Essential documents for business succession planning include buy-sell agreements, succession plans, and updated estate plans for the business owner. A complete succession plan will often integrate family-limited companies or limited partnerships and certain types of irrevocable trusts. 

Business Owners Need a Trusted Advisor/Attorney 

Estate planning attorneys are uniquely positioned to become trusted advisors to business owners. 

An attorney will perform the following…

  • REGULAR CHECK-INS: Stay updated on your clients’ business and personal developments. 

  • PROACTIVE ADVICE: Offer insights and recommendations before issues arise. 

  • HOLISTIC PLANNING: Integrate business and personal estate planning for a comprehensive approach.

Business Succession Planning 

Integrating business succession planning into your estate planning is important and should be considered sooner than later.


This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧 kevin@kmckernan.com  | 📞 718-317-5007

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