Succession planning is the strategic process of preparing for the orderly transfer of leadership, ownership, and control of a business to the next generation of owners or managers. It addresses both expected transitions, such as retirement, and unexpected events, such as disability or death. Effective succession planning considers governance, valuation, funding, and tax implications, and often involves buy-sell agreements, key person insurance, and executive development. For privately held businesses, especially family enterprises, succession planning is critical to preserving enterprise value, minimizing disruption, and aligning the interests of active and non-active family members or partners.

Advisors work on succession planning with business owners, CPAs, and attorneys to design buy-sell agreements, identify successors, and determine how ownership will be transferred and financed. Life and disability insurance are frequently used to fund buyouts at death or disability and to protect the company from the loss of key leaders. Advisors also address governance issues, such as boards, voting structures, and employment policies for family members. Regular reviews keep succession plans aligned with changing valuations and family dynamics. Understanding succession planning helps advisors guide owners through complex, emotional decisions and to position insurance as a practical funding and risk-management tool within a broader continuity strategy.