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Questions about succession planning will come up quite naturally when business owners are doing their estate and retirement planning. When key employees need to be retained, ownership and succession matters are again likely to be put on the table. 

Key Business Succession Planning Questions to Address

  • Who will be available to succeed to management? Do they already have the necessary skills and training? 
  • What will be the cash flow needs of the business at the founder’s death? What impact will the founder’s death have on the value of the business? 
  • What will be the cash flow needs of the founder’s estate at his or her death? How will those needs be met? 
  • What role will nonfamily members play in the succession?

A trust can be a particularly useful mechanism for providing ownership across several generations. The trust may hold investment assets as well as the business interests. A corporate trustee can handle trust administration, providing custodianship and investment management, as well as fiduciary supervision of the trust. When some family members participate in the business and others do not, a trust may provide a mechanism for balancing interests and addressing conflicts without rancor or bias.