Creating a Business Succession Plan

Building a successful business requires a lot of time and energy. But too often, business owners delay planning for what comes next. Whether we’re stepping aside because of retirement, illness, or unforeseen circumstances, it’s essential to have a business succession plan in place.

At the Law Offices of Julie A. Schejbal, CHTD, we can help you through the business planning process. Based in Dunkirk, Maryland, our firm proudly serves clients throughout St. Mary's, Calvert, Charles, and Prince George's counties—and beyond. Ready to secure your peace of mind with a business succession plan? Let's talk about protecting what matters most to you.

Why Business Succession Planning Matters

As business owners, you carry the weight of responsibility—not only for yourself but also for your employees, clients, and partners. Succession planning isn’t just about who takes over the company; it’s about preserving relationships, assuring financial stability, and maintaining long-term operations.

Without a plan, disputes can arise among heirs, business partners, or staff. Transition periods can lead to confusion, delays in decision-making, or even financial loss. That’s why you must take proactive steps now—while you're in control and able to make decisions that reflect your wishes and values.

Identifying Long-Term Goals

Before creating a succession plan, you must identify what you want for the business in the long run. You might ask yourself:

• Do you want the business to stay in the family?

• Are there employees or partners capable of stepping into leadership?

• Would selling the business be a better fit for your financial goals?

Answering these questions will help shape the direction of your plan. To keep the business in the family, you must assess each potential successor’s interest and qualifications. You'll need to prepare for valuation, tax planning, and contract negotiations if you're considering a sale. Your goals will guide the rest of the planning process.

Choosing the Right Successor

Choosing a successor isn’t always straightforward. Sometimes, the most obvious choice may not be the best fit for leading the business forward. Evaluating a potential successor’s skills, leadership style, and long-term commitment to the business is important.

When making this decision, you should consider:

• Business knowledge and operational experience

• Trustworthiness and decision-making ability

• Communication skills and the ability to work with others

• Willingness to uphold the company’s values and goals

It also helps to involve trusted advisors or mentors in these discussions. Their input can help you view the situation from different perspectives and fully consider the implications of each choice.

Training and Transition Planning

Once you choose a successor, training and development become the next focus. You can’t expect someone to step into leadership without preparation, and giving them the tools they need to lead is one of the most important parts of this process.

A gradual transition often works best. You might begin by sharing leadership responsibilities or involving the successor in important decisions. This allows for coaching and adjustment before the full transfer of authority.

At this stage, it’s helpful to document important information such as:

• Key client relationships and contacts

• Financial processes and vendor agreements

• Business policies and procedures

• Legal obligations and upcoming commitments

Documenting these details helps your successor seamlessly transition into their role, supporting uninterrupted progress for the entire organization.

Estate Planning and Business Succession

Estate planning plays a direct role in succession planning. The two go hand in hand. If one of you passes away unexpectedly, the decisions outlined in our estate plan can affect how the business is handled. That’s why coordinating these efforts carefully is so important.

For example, if you want a family member to take over, that intention should be clearly stated in both the succession documents and estate planning documents. Without consistent language, confusion can arise.

Another critical question is how you'll transfer your business interests. Will you place them in a trust for long-term protection? Sell your shares to a business partner? Split ownership among family members? Each path carries different tax implications and legal requirements that could significantly impact your financial future.

Protecting Business Interests With Legal Agreements

Legal documents form the backbone of any strong succession plan. They protect your wishes and specify responsibilities for everyone involved. Key documents to consider include:

• Buy-sell agreements: Define how ownership is transferred if a partner leaves, retires, or passes away

• Operating agreements or bylaws: Outline rules for management and decision-making

• Trust documents or wills: Clearly state how business interests are distributed in your estate

It's important to review and update these documents regularly, especially after major changes in your business or family structure.

Tax Planning and Financial Considerations

Succession planning often brings important financial questions. Taxes can impact the transfer of ownership, especially when large business assets are involved. To avoid unnecessary financial pressure, you should plan ahead.

You may want to work with accountants or financial advisors to:

• Project future business value

• Analyze potential estate or gift tax liabilities

• Consider gifting shares of the business during our lifetime

• Structure payments if selling to a family member or partner

These steps help you reduce surprises and create a smoother transition for everyone involved.

Addressing Family Dynamics

Family-owned businesses present unique challenges to succession planning. Emotions, assumptions, or long-standing dynamics can complicate decision-making. To avoid conflict, you should have open conversations early on.

A few helpful strategies include:

• Holding structured family meetings to discuss the future

• Talking openly about expectations and roles

• Making decisions based on preparation and capability—not just relationships

Having a neutral third party, such as a legal advisor familiar with estate planning, can help guide these conversations and keep the focus on what’s best for the business.

Building in Flexibility

Life changes—and so do your businesses. That’s why your succession plan needs to allow for updates and adjustments over time. You might identify a successor now, but later realize someone else is a better fit. Or you might decide to retire sooner—or later—than planned.

Reviewing your plan every few years, or after major life events, keeps it relevant. Births, deaths, divorces, and new business opportunities can all influence your decisions.

By treating succession planning as an ongoing process, you're better prepared to adapt as circumstances change.

Communicating the Plan

Once you've developed our plan, you need to share it with the right people. Keeping it private or informal creates uncertainty and can lead to conflict. Instead, you should communicate clearly and provide documentation where appropriate.

This might include:

• Discussing the plan with family members and business partners

• Notifying employees affected by leadership changes

• Formalizing the plan in official documents and legal agreements

When everyone understands what to expect, they’re more likely to support the transition. It also helps you maintain trust within your business and among key stakeholders.

How We Can Help

At the Law Offices of Julie A. Schejbal, CHTD, we help business owners align their estate planning and succession strategies with long-term goals. We work closely with clients to prepare legal documents, evaluate tax considerations, and guide the conversations that lead to sound ownership transitions.

We understand the unique needs of Maryland businesses. Whether you're in the early stages of planning or ready to formalize a transition, we can help structure the process to reflect your values and protect your interests.

Let’s Plan Ahead Together

Planning for business succession isn’t something you should put off. The future of your business—and the people who depend on it—deserves thoughtful preparation. By taking the time to clarify your goals, select a successor, and coordinate with estate planning, you give your business the strongest foundation possible.

If you're ready to start the conversation about your business succession plan, contact the Law Offices of Julie A. Schejbal, CHTD. We serve clients throughout Dunkirk, Maryland, and surrounding areas, including Calvert County, Prince George’s County, Charles County, and St. Mary's County. Let's work together to protect your business, support your family, and plan for what's next. Call today.