Get Ready for Your Future with Succession Planning

BUSINESS SUCCESSION PLANNING REQUIRES YEARS OF CAREFUL STRATEGIZING FOR IDEAL RESULTS. ACCOUNTANTS AND OTHER EXPERTS CAN HELP.

By George N. Saliba, Contributing Writer On Apr 2, 2026

With more than 52% of American business owners now over age 55, succession planning is widespread, particularly as owners’ adult children are sometimes not interested in taking over their parents’ companies, and private equity (PE) is purchasing family-owned firms in a fever-pitched trend. Assembling a team of highly skilled professionals who can adeptly handle the nuances of family transitions, Employee Stock Ownership Plan (ESOP) transitions to long-time workers, or sales to PE is crucial. Planning for such events years ahead of time is also key. 

Advanced preparation is necessary for tax and other considerations surrounding, for example, changing a partnership to a C corporation, or changing a C corporation to an S corporation, with various business structures ideal in certain situations. For example, businesses must have a C corporation issuing Qualified Small Business Stock (QSBS) that must be held for years, in order to exclude the gain from federal capital gains tax. Businesses will also want to ensure they increase the value of their firms in strategic ways to make them appealing to buyers or, separately, tailor their companies for family members.

Training employees/family members to take a company’s reins is another succession planning consideration, as are owners’ personal financial moves such as establishing generation-skipping legal trusts or, say, taking full advantage of federal estate tax exemptions. Of note, through the “One Big Beautiful Bill Act” passed by Congress and signed into law by President Donald Trump, the federal estate tax exemption increased to a new $15 million exemption per individidual as of January 2026, meaning that married couples can now pass a total of $30 million dollars tax-free beginning this year.

Overall, everything with succession planning requires attention to detail. “You cannot just decide today that you want to sell [your business] and think that you’re going to have a transaction tomorrow that’s going to be the best transaction possible for you,” warns Paul Fried, CEO of the accounting firm Smolin, Lupin & Co., LLC. “That just doesn’t make any sense. You have to plan for it. You have to understand what your goals are, and make sure that you pick the right buyer, whether they’re private equity or strategic … [or] have good discussions with you family to see if they’re interested in the business.”

Glenn L. Friedman, chairman of the board and partner in the advisory services department at the accounting firm Prager Metis, also stresses the need to plan ahead, saying, “I really think that a good businessperson starts to think about how they get out of business from the day they [first] go into business.”

Experts say some business owners procrastinate with succession planning due to family dynamics/arguments and related complex shareholder agreements, as well as not wanting to relinquish control of the business even though they are older and eventually must do so. Business owners may also simply not want to face their own retirement and eventual mortality. In the event of a business sale, owners may additionally underestimate the purchasing prowess of PE firms and the need for a skilled team of professionals to negotiate with PE.

“PE has experienced counsel [who are] working on their behalf,” explains Daniel Mayo, J.D., L.L.M., partner at the accounting firm Withum. “They’ve done this before. I would say that a seller in a transaction to PE needs to have similarly experienced advisors. Choices you make along the way in a transaction can affect tax consequences, and a small miss can lead to a big dollar cost.” 

A Team of Professionals

A business owner’s overall team may consist of accountants, attorneys, investment bankers and valuation experts. “Each deal takes on a life of its own,” Mayo explains. “Oftentimes, we’re working with [legal] counsel, and we like to maintain close coordination with counsel to make sure we’re in lockstep – all moving in the same direction. If there’s an investment banker involved, sometimes they’ll take the lead and coordinate calls between counsel and tax counsel. It’s a mixed bag.”

Prager Metis’ Friedman says, “You want a group [of professionals] who are supportive of each other, and attentive and responsive. If you can find a group that communicates well and understands their roles, you’re going to have a much better chance of succeeding. I don’t often find that any of those groups are stepping on each other.”

Keeping in contact with one’s professionals is also critical. Smolin’s Fried remembers: “A client who had been looking to sell [his business] had been through a couple of different LOIs (Letters of Intent), and then went and signed another LOI after the first couple of deals fell apart. 

“Then [the client] called me and [also] the attorney to say that he had signed this LOI. And right when I looked [at the LOI], I said, ‘Why wouldn’t you have called [me before signing]?’ There were definitely some tax planning opportunities that we had to then go back to, post-LOI signing, and negotiate out. We were able to do it, but it took more time. Don’t be penny wise and pound foolish.”

Fried additionally cautions business owners about being contacted “out of the blue” by private equity firms offering lucrative terms; he suggests consulting with professionals to see, in part, if the business might be worth even more money, to learn if the private equity firm has experience in the industry, and to know if employees from other acquisitions tend to stay after PE takes over.

“If you have the wrong buyer and don’t sell 100% of your company, keep in mind that you’re likely still going to be working there,” Smolin’s Fried also says. “They’ll probably give you a two, three, or maybe even five-year employment contract, and their goal would be to sell the balance of your equity in five years. There might even be some contingent payments on the back end. You want to make sure that you’re with the right group, and that you can work with those people.”

Experts note that most deals over approximately $10 million seem to involve PE, with PE purchasing multitudes of businesses and combining them into larger organizations to obtain economies of scale before selling them in the future. 

Preparing for PE buyers early on is necessary even if an owner isn’t thinking about selling. “A lot of our clients come to us and say, ‘I’m not ready. We received an offer. We want to sell. What can we do?,’” explains Joseph Cecere, director in EisnerAmper’s forensic, litigation, and valuation services practice. “Can we still help the [client] the best we can? [Yes,] but the answer is we can do more with more time.”

Cercere also notes that business owners should be prepared for their own sicknesses and unexpected deaths, and/or early retirements. “You need to have continuity in place,” he stresses. “It’s hard to get life insurance after you’re dead, right? You want to [do all these things] as early as possible.”

Conclusion

Transitioning a business to family members, employees, or selling to outside buyers can be fraught with difficulties, but, overall, New Jersey’s business leaders are continuing to age as PE scans the landscape. Smolin’s Fried predicts that the succession of businesses will increase in 2026 as the economy grows and business values rise.

Business owners need an appropriate mindset. Fried concludes, “The generation that is transitioning – particularly to family – must understand that in order to have a proper transition, they’ve got to let go of the reins once the next generation is ready to accept the reins.”

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