What we find, however, is that for how much love and effort is poured into a small business to make it thrive, often the succession planning is not curated as carefully as is deserved. We thought we’d come to you with some thoughts and strategies that might help business owners that haven’t yet taken the leap into estate planning for their small business. This isn’t something you want to leave to chance - Without estate planning in place, your business - and everything you’ve worked so hard to build - could end up tangled in probate, taxes, or disputes that leave your loved ones overwhelmed and dealing with headaches for months or even years to come. Here are our best tips to get started!
Small Business Owners need Small Business Strategies.
Most people have heard of a will, or have something set up for their own personal assets. But, the game is completely different when you’re a business owner. Ultimately, you will need a plan that covers, at the bare minimum, a few items:
- Who will take over if something happens to you during your life?
- How will you handle the taxes or debts tied to your company?
- How will you sell, transfer, or close the business smoothly?
What might happen if you don’t have these considerations covered with legal documents and arrangements (ie: a plan!)? We’re glad you asked! Without a plan, you can anticipate:
- Probate Delays: Confusion can lead to your business being tied up in court for months - when your customers and employees need stability the most.
- Family Conflict: A spouse, child, or partner might not know your business’s operations, leading to mismanagement, client dissatisfaction, or stress.
- Tax Concerns: Whether it’s income tax, capital gains tax, or estate tax, proactive planning takes into account these potential concerns and addresses what can be most beneficial. .
Many business owners make the mistake of thinking that estate planning is just about death - But in reality, it’s about smooth transitions, in life or in passing.
Becoming Familiar with New York’s Laws
Legal frameworks are more than fine print: they shape how your estate plan will actually work for you and your business. Here are some of the things that we suggest keeping at the top of mind when you start creating your plan:
- New York Estate Tax
Per the NYS Department of Taxation & Finance, New York imposes its own estate tax on estates over approximately $7.16 million (for 2025). Could your full business and personal assets approach that? Proper planning can help minimize this.
- Business Succession Planning
Whether your business is an LLC, partnership, or corporation, you need a formal buy-sell agreement that outlines who steps in, how buyouts happen, and at what price. As well, the formal name of “buy-sell agreement” incorporates planning between spouses or parents and children (or others) that allows for certain transfers to occur (ie: gifting) whether it’s during life or at passing, and this can greatly help with planning. Having a business properly managed despite an owner’s incapacity during life is crucial and avoiding probate and making transitions easier at death is also critical for planning considerations.
- Asset Titling
Tax planning hinges on proper ownership - how is your business titled? Jointly? Under a trust? These little details matter for inheritance and control. Without this structure, your estate plan might only transfer business assets to your heirs - without any clarity on navigating your actual business.
Trusts & Succession Planning
While in many cases trusts can help you avoid the process of probate entirely, they can also help maintain control of your business after your passing.
Revocable Living Trust
- You manage assets now - and can update beneficiaries or business structure anytime.
- It can help you avoid probate in the event of your passing, keeps everything private, and allows a successor trustee to step in during incapacity.
Irrevocable Trust
- Moves the business out of your estate for estate tax purposes.
- Ideal if your business and personal assets approach the estate tax threshold.
Succession Planning: Your Business, Your Plan.
This is a tough question for many, but at the end of the day… Who do you want running the business if you can’t?
- Family Successor: A child or sibling may be ready but might need training and support - start the process now.
- Co-owner or Management Team: If others are part of day-to-day operations, formalize responsibilities and make sure key individuals are aware of your succession plan.
- Outside Buyer / Key-Person Insurance: Choose exit terms or insurance funding to make any necessary transitions easier.
Buy‑Sell Agreements: Business Safety Nets
Have you ever tried to have a best friend for a roommate? Or perhaps lent money to someone you thought would pay you back right away but they didn’t? Sometimes the people you least expect are those who make ‘business’ relationships much more challenging. These types of scenarios are also why having a Buy-Sell agreement is critical. When it comes down to it, if a relationship sours, or people end up doing what was least expected, you want the paperwork to back up your plan!
Buy-Sell agreements define:
- How valuation occurs (appraisal or formula)
- Triggering events: death, disability, retirement
- Who gets the business - family or co-owner?
- Funding method: cash, insurance, financing
Power of Attorney & Healthcare Proxy: Don’t Forget Personal Plans
As a business owner, having your personal documents and estate plan in place also matters.
- Durable Power of Attorney lets someone manage legal or financial tasks for you if you become incapacitated.
- Health Care Proxy & Living Will ensures your medical wishes guide decisions - without burdening business plans.
- Guardian for Minor Owners: If a child owns part of the business, name a successor guardian to manage their interest.
Ultimately, having your personal affairs in order keeps family, medical, and business matters from intertwining confusingly after you’re gone.
First Thing’s First
Ready to start taking a few steps on your own? Here’s what we would suggest:
- Inventory your business assets, partners, and structure
- Identify who should run things if you can’t - and start training them
- Meet with an estate planning attorney to draft: will → trust → buy-sell → powers → other documents
- Implement the plan with your estate planning attorney (title, trust funding, insurance, etc.)
- Review annually or after major life/business changes
Estate strategy isn’t reserved for big corporations. For small business owners, it’s about security, peace of mind, and mitigating tax burden. You’ve built something that matters - don’t let it fall through the cracks due to outdated planning or documents.
If you’re ready to get started, make sure to visit our
Estate Planning page or
schedule a consultation. Let’s create a plan that works for you and honors the blood, sweat, and tears you have put into your small business!
