It can take a lifetime of hard work to build a successful company, but ensuring your legacy lives on ultimately depends on securing a smooth transition to your successors.

A comprehensive succession plan offers stability and security for your family, and enables your business to continue to flourish, which can provide peace of mind. It’s also a way to make progress towards other life goals you have in store.

Creating your business succession plan involves confronting some difficult questions. What do you want your business to look like when you’re gone? Who’ll control it, and who’ll run it from day to day? Many people foresee family playing a central role in their company’s future, but it can be challenging to make this happen while preserving unity both at home and in the business.

Involving your family in planning conversations at an early stage can help rally everyone behind a shared vision, which will likely prove useful when those plans are eventually put into practice. When people understand precisely who’s making decisions and how, they’re usually better at communicating and collaborating.

It’s also important to start preparing family members for their new roles as soon as possible. Active mentorship and coaching should combine with external education and training. Plus, giving your successors a practical familiarity with both the culture and mechanics of your business is a crucial part of any transition.

Some family members won’t seek or suit an active role in the business but may still want an ownership stake or a say in how it’s run. Tread carefully and manage expectations in order to separate your family business from the business of family.

Successful succession strategies have several key considerations in common:

At the forefront is protection against estate and inheritance taxes, and the possibility that some or all of your company has to be sold to satisfy such liabilities. Korean tech giant Samsung provides a cautionary tale in this regard: its former chairman’s family was forced to sell almost $2 billion worth of shares to pay death duties.¹ Other creditors can also crop up at an inopportune time, putting your business legacy and even family assets at risk in the absence of effective forward planning as to who pays which debts when, and with what capital.

Ensuring an equitable division of both benefits and burdens among your family is also vital. Not all inheritances will look the same, and in some jurisdictions forced heirship laws may dictate to an extent how your estate is split up. Nevertheless, clearly identifying roles and responsibilities – and explaining how differences are fairly justified – can be key to avoiding family discord.

Trusts and life insurance are wealth planning tools that entrepreneurs should consider putting in place. In addition to safeguarding functions, life insurance can provide essential liquidity for beneficiaries who wish to monetize their shares and for the successors you want to carry on running your company free from onerous operational or ownership constraints.

Inside your family or out, whomever you choose to take over the helm needs to be qualified to do so – and remember that ownership and management don’t necessarily go hand in hand. You should anticipate any potential control issues well in advance, particularly if your business is structured as a partnership.

Central to any smooth transition, however, is the question of when and how to reduce your direct involvement. Loss of a key figure or figures can have an impact on company morale, performance, and goodwill, and may necessitate an appropriate injection of capital. But bear in mind that stepping on your successors’ toes could do more harm than good.

The tools and techniques that best suit your succession plan will depend upon the nature of your business, your individual circumstances, and your long-term goals. Consult with an advisor who can provide tailored insights gleaned from years of experience guiding others through similar situations and introduce your family to wealth transfer planning professionals.²

At such an inherently emotional moment in your enterprise journey, objective opinions from a third party can be of significant assistance in selecting and executing optimal solutions. Bringing in an outside perspective to evaluate preparations for the future of the business has the potential to ease tensions in both your family and your company as you transition together to whatever comes next.