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Succession Planning for Your Business

It may be hard to imagine right now, but odds are the business you’ve worked so hard to create will be owned by someone else in the future. Eventually, you will either give up the helm voluntarily when you retire, or involuntarily as the result of an unexpected event. 

Charting a path for your small business

Succession planning helps you specify, in writing, what will happen to the business when you retire, become disabled, die prematurely, or otherwise step down. It is not a one-time event, but instead a continuous process that starts with your goals, and builds and improves over time. Your succession plan is also a roadmap for you, your family and your employees to help ensure that, in the event you are no longer able to run the company, any ill-advised decisions are kept to a minimum. By creating a succession plan today, you can make the decisions now about what will happen to your company in the future.

What goes into a succession plan?

Like any strategy your business may already have in place, a succession plan follows the same principles. It should address the who, what, when, where, why and how you would like to transition your business. Your professional tax advisors will be able to provide you with detailed guidance on setting up a succession plan customized for you and your company. Generally speaking, your succession plan should address the following:

  • Your goals – what do you want from the business when you exit?
  • Your successor(s) – who will take over and are they prepared?
  • Ownership – what will future owner roles be, and what will the ownership percentages look like?
  • Management – how will you keep key employees on board through the transition and beyond?
  • Transfer plans – what are the steps involved in the transfer, and what is the timeline?
  • Triggering events – what events (death, disability, retirement, divorce, bankruptcy) will start the transfer process?
  • Purchase price/financing – where will the funds come from for a buy-out and what are the tax implications?

Other considerations

Your succession plan will also have an impact on both your retirement plan and estate plan. Some additional considerations you will need to keep in mind:

  • Value of the business: You need to know the true value of the company so you are confident the succession plan is accurate. Keep tabs on company value regularly (every three years) and update your succession plan to account for any changes
  • Estate Equalization: If a family member who works in the business is the chosen successor, you should indicate how you plan for equitable distribution of the remainder of your estate for other family members, such as other children, who have no knowledge of the business.
  • Sale Proceeds: You’ll also want to include instructions relating to taxes from the proceeds of the sale of your business, and detail what should occur regarding your personal estate plan.

Timing matters

Regardless of what form your succession plan takes, its ultimate success often hinges on timing. The sooner you start planning for the eventual transition, the more flexibility you’ll have in making future adjustments because — let’s face it — the only thing that’s guaranteed is change.



The information provided is not written or intended as specific tax or legal advice. Representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of MML Investors Services, LLC or their affliated companies.




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Ann Hauser Laufman is a Registered Representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC (  Supervisory office:  3 Greenway Plaza, Suite 1500, Houston, TX  77046, 713-402-3800.  ALA Financial Group, LLC is not a subsidiary or affiliate of MML Investors Services, LLC.


*Winners appearing on this page do not pay a fee to be considered or to win the Five Star Award. Professionals with a digital profile have paid a promotional fee.
This award was issued on July 1, 2022 by Five Star Professional (FSP) for the time period July 1, 2022 through June 30, 2023. Wealth managers do not pay a fee to be considered or placed on the final list of Five Star Wealth Managers. Award winners may pay for marketing tools, including this advertisement. The award is based on 10 objective criteria. Eligibility criteria required: 1. Credentialed as a registered investment adviser or a registered investment adviser representative; 2. Actively licensed as a registered investment adviser or as a principal of a registered investment adviser firm for a minimum of 5 years; 3. Favorable regulatory and complaint history review (As defined by FSP, the wealth manager has not; A. Been subject to a regulatory action that resulted in a license being suspended or revoked, or payment of a fine; B. Had more than a total of three settled or pending complaints filed against them and/or a total of five settled, pending, dismissed or denied complaints with any regulatory authority or FSP's consumer complaint process. Unfavorable feedback may have been discovered through a check of complaints registered with a regulatory authority or complaints registered through FSP's consumer complaint process; feedback may not be representative of any one client's experience; C. Individually contributed to a financial settlement of a customer complaint; D. Filed for personal bankruptcy within the past 11 years; E. Been terminated from a financial services firm within the past 11 years; F. Been convicted of a felony); 4. Fulfilled their firm review based on internal standards; 5. Accepting new clients. Evaluation criteria considered: 6. One-year client retention rate; 7. Five-year client retention rate; 8. Non-institutional discretionary and/or non-discretionary client assets administered; 9. Number of client households served; 10. Education and professional designations. FSP does not evaluate quality of services provided to clients. The award is not indicative of the wealth manager's future performance. Wealth managers may or may not use discretion in their practice and therefore may not manage their clients? assets. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by FSP or this publication. Working with a Five Star Wealth Manager or any wealth manager is no guarantee as to future investment success, nor is there any guarantee that the selected wealth managers will be awarded this accomplishment by FSP in the future. 3,215 Houston-area wealth managers were considered for the award; 176 (5% of candidates) were named 2022 Five Star Wealth Managers. 2021: 3,133 considered, 173 winners; 2020: 3,219 considered, 174 winners; 2019: 2,992 considered, 209 winners; 2018: 3,114 considered, 218 winners; 2017: 2000 considered, 228 winners; 2016: 1763 considered, 437 winners; 2015: 2289 considered, 408 winners; 2014: 3958 considered, 410 winners; 2013: 3001 considered, 504 winners; 2012: 2105 considered, 425 winners.