Succession planning is vitally important for any business whether there is one owner or multiple owners. In one case our firm was originally contacted by a person who ran a successful business. They were looking to sell the business and he was going to engage our firm to represent them if and when they found a buyer. We discussed that there was no written succession plan in place but since the partners completely trusted each other they never felt the need to do so. Sadly, one of the owners suddenly died before a buyer appeared and before we were ever engaged to represent them.
The surviving owner and the deceased owner’s family had different ideas on the valuation of the deceased partner’s share and within weeks attorneys were hired on both sides. When talks broke down litigation quickly ensued with a legal battle that spanned years, cost each side hundreds of thousands of dollars in legal bills, and damaged relationships.
If the partners had a succession plan in place, they likely could have avoided years of bitter fighting and hundreds of thousands of dollars in legal bills. It is never fun to talk about disability or death let alone pay several thousand dollars in legal fees. However, taking the time and spending the money to set up a thoughtful succession plan can reap huge benefits and savings down the road for you and your loved ones.