A Business That Outlasts You, By Design

Every business owner reaches a point where the question can no longer be deferred: what happens to this company if something happens to me? Whether you are planning for retirement, preparing for an unexpected event, or thinking about the next generation, a well-structured succession plan is what separates a business that continues from one that doesn't. At Schanker and Schanker, we work with business owners across Long Island, Manhattan, and New Jersey to build succession plans that preserve what you've built and position it to keep growing.

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What a Succession Plan Actually Does for Your Business

Business succession planning is the legal and financial architecture that determines who takes over management or ownership of your business — and under what terms — when you retire, become incapacitated, or pass away. Without that architecture in place, the outcome is left to circumstance: family disputes, forced sales, court intervention, or a business that simply stops operating.

 

A succession plan addresses the full range of transition scenarios:

 

  • Who assumes leadership or ownership, and when
  • How ownership interests are valued and transferred
  • What role, if any, family members or key employees play in the transition
  • How the business is funded through the transition period
  • How the plan coordinates with your broader estate plan

 

For business owners who are also estate planning clients, succession planning and estate planning are inseparable. The ownership structure of your business, the terms of any transfer, and the tax consequences of that transfer all flow directly into your estate — and must be planned together.

Buy-Sell Agreements: Setting the Terms Before They're Needed

One of the most important documents in any business succession plan is the buy-sell agreement. A buy-sell agreement is a binding contract among business owners that establishes in advance exactly how ownership interests will be transferred if an owner dies, becomes disabled, retires, or wants to exit. It names who can buy, at what price, and on what terms — removing those decisions from a moment of crisis or conflict.

 

Buy-sell agreements also address how the purchase will be funded. Life insurance is a common and effective mechanism: a policy is structured so that the proceeds are available to fund the buyout at the triggering event, without requiring the surviving owners or the business to come up with liquidity on short notice.

 

Valuation is equally important. A buy-sell agreement that doesn't specify how the business will be valued — or that relies on an outdated figure — can generate exactly the disputes it was meant to prevent. We work with clients to establish valuation methods that are clear, defensible, and regularly reviewed as the business grows.

Family Business Succession and the Next Generation

Succession planning for family-owned businesses involves a layer of complexity that purely financial arrangements don't capture. When the next generation is involved — or when some family members are active in the business and others are not — the plan must address both the business interests and the family dynamics simultaneously.

 

Common issues we help clients navigate include:

 

  • Transferring ownership to children who are active in the business while treating non-participating children equitably through the estate
  • Identifying and retaining key non-family employees whose continued involvement is essential to the business's value
  • Structuring the transition of management authority separately from the transfer of ownership
  • Using gifting strategies and trust structures to transfer business interests in a tax-efficient manner over time

 

The goal is continuity and growth through the transition — not just a legal transfer of shares. A succession plan that ignores the human and operational dimensions of the business rarely achieves either.

Frequently Asked Questions About Business Succession Planning

  • What is the difference between business succession planning and estate planning?
    Estate planning addresses how your personal assets — including your ownership interest in a business — are distributed after your death. Business succession planning focuses specifically on how the business itself continues operating through a transition in ownership or leadership. For business owners, the two plans must be coordinated: decisions made in the succession plan directly affect the estate, and vice versa.
  • How do I plan for who takes over my business if something happens to me?
    A succession plan designates who assumes management or ownership of the business under defined circumstances — retirement, incapacity, or death — and sets out the legal and financial terms of that transfer. It can name a family member, a key employee, a co-owner, or an outside buyer, depending on your goals and the structure of the business.
  • Do I need a buy-sell agreement if I'm the sole owner of my business?
    If you have no co-owners, a traditional buy-sell agreement between partners doesn't apply. However, a sole owner still needs a succession plan that addresses who will manage or acquire the business, how it will be valued, and how the transition will be funded. Trusts, key-employee arrangements, and structured sale agreements are common tools in this context.
  • How is a business valued for succession planning purposes?
    Business valuation for succession planning purposes depends on the nature of the business, the industry, and the transfer mechanism being used. Common approaches include capitalization of earnings, asset-based valuation, and market comparables. The valuation method should be specified in the buy-sell agreement and reviewed periodically — particularly after significant changes in revenue, ownership, or market conditions.
  • Can succession planning reduce estate and gift taxes on a business transfer?
    Yes. When structured correctly, a business succession plan can incorporate gifting strategies, family limited partnerships, grantor retained annuity trusts, and other mechanisms that transfer business interests at reduced taxable values over time. The intersection of business succession and estate and gift tax planning is an area of deep focus at our firm, and coordinating these strategies is often where the most meaningful tax savings are achieved.