Tips for a Family Business Succession Plan
How to get your baby on board in Ohio
By Judy Malmon, J.D. | Last updated on January 11, 2023Use these links to jump to different sections:
When starting or taking over a family business, you may not be thinking about how it will survive in the future. But succession planning is an important consideration at all stages of business development. In a family business, where relationships are more than professional and multiple family members can bring differing perspectives, this can be particularly critical.Family Businesses Big and Small

- What will happen to the business if current leadership is no longer managing the day-to-day operations?
- Will it continue? And if so, who will run it?
- Under what terms can it be sold?
- What will happen in the event of your death?
Legacy = Vision + Planning
In approaching the succession planning process, Vergilii recommends a foundation of thinking through long-term goals and putting agreements in place. “The key is for that first generation, the ones who started the company, to create what they envision the legacy being,” she says. “Because if you leave it to the second generation, which is often the generation where a sale happens, it’s much more difficult to navigate.” In contemplating a successful transition, Vergilii identifies two primary protections. First, she advises that “getting a good buy-sell agreement in place between the generations is absolutely, positively vital. That will set forth who can control when a sale happens. The terms of the buy-sell agreement is the most important part of succession planning. “A close second,” she continues, “is making sure that there is ‘key man’ life insurance in place, so that if something happens, the funds are available to follow through on a buyout, and/or that money can be used to hire a CFO or president with really good skills, so the business doesn’t fall apart.” Business planning attorneys, like Vergilii, recommend that you consider these issues now, and that you revisit them regularly. “Just like an estate plan, your ownership and exit strategy should be a living document,” she says. “I tell my clients to think about this on an annual basis, because things do change. Just because something made sense five years ago, it may not still make sense.” For more information on this area, see our overviews of business organizations, closely held business and estate planning.What do I do next?
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