Business Succession Planning
What It Is, Why It’s Important, and How to Do It
At Old City Law, our experienced Florida business attorneys understand the unique challenges that Florida business owners face when planning for the future of their business(es). Our St. Augustine business lawyers understand the complexities of business succession planning strategies and are well experienced to navigate and implement a plan that is tailored for you and your business(es).
What is Business Succession Planning?
Business succession planning is the process of preparing for the orderly transfer of ownership and leadership of a business when the owner retires, becomes incapacitated, or passes away. In Florida, business interests are treated as personal property and can be transferred through a will, trust, or absent any plan, through the rules of intestacy.
For Florida business entities such as LLCs, corporations, or partnerships, the governing documents such as the operating agreement or shareholder agreement typically control how ownership interests are conveyed. Without a clear plan, the business may end up in probate court, causing delays, added costs, and potential disputes.
At its core, succession planning combines traditional estate planning tools with business-specific strategies to ensure continuity, protect assets, and minimize disruption.
Why is Business Succession Planning Important?
The stakes are high for Florida business owners who skip succession planning. Without one, a business can face leadership gaps, family conflicts, forced sales, or even collapse after an unexpected event. While Florida has no state estate tax, federal estate taxes can still create significant burdens if transfers are not structured properly.
A thoughtful succession plan preserves your hard-built legacy, safeguards family wealth, and keeps the business running smoothly. For the many business owners, a business succession plan helps prevent inheritance disputes and ensures ongoing business affairs in the best interest of the business and your family. It also prepares for sudden disability or death, allowing designated successors to step in without interruption.
Florida’s probate process can be time-consuming and public, potentially exposing sensitive business information. Proper planning often uses tools like revocable living trusts to bypass probate entirely, maintaining privacy and control. Starting early—ideally years before any transition—gives you flexibility to adapt to changing market conditions or personal circumstances.
Ultimately, succession planning provides peace of mind and protects everything you’ve worked to build.
How to Create a Business Succession Plan
Developing an effective succession plan in Florida requires careful thought, professional guidance, and attention to state-specific rules. As St. Augustine business attorneys, we recommend the following steps:
Evaluate Your Business and Objectives Start by reviewing your business structure and identifying key stakeholders (family members, partners, or key employees). Clarify your goals: keep the business in the family, sell to employees or third parties, or wind it down?
Select and Prepare Successors Decide who will take over management and ownership roles. For family transitions, define clear governance rules early. Begin training successors well in advance so they’re ready when the time comes.
Prepare Essential Legal Documents Key documents typically include:
Buy-Sell Agreements – These spell out how ownership interests are purchased upon events like death or retirement, often funded with life insurance to provide immediate cash.
Operating or Shareholder Agreements – Update these to govern transfers, set valuation methods, and include any transfer restrictions allowed under Florida law.
Wills and Trusts – Placing business interests in a revocable living trust avoids probate and lets you retain control if you become incapacitated. Include durable powers of attorney for business decisions.
Overall Estate Plan Integration – Coordinate everything to minimize federal estate and gift taxes.
Handle Tax and Valuation Issues Work with tax professionals to structure transfers properly and avoid unintended tax consequences. Use fair market valuations and consider gifting strategies when appropriate.
Protect Business Assets Document intellectual property, use non-disclosure and non-compete agreements, and safeguard confidential information during any transition.
Review and Update Regularly Major life events, business growth, or changes in the law can affect your plan. Schedule periodic reviews to keep everything current.
Following these steps creates a strong, Florida-compliant plan that protects your business and your family.
At Old City Law, our dedicated business lawyers are here to guide local St. Augustine business owners as well as business owners throughout the State of Florida through every stage of business succession planning. If you’re ready to secure the future of your business, contact us today
As your trusted St. Augustine business attorneys, we’re committed to helping you achieve lasting success.