With a generation of business owners approaching retirement, many are confronting a defining question: What happens next — not just for the business but for the family and legacy it supports?
Baby boomers still own a significant share of privately held businesses. As they step back, they become part of a wave of transitions underway amid the Great Wealth Transfer — the multiyear shift of assets from one generation to the next. These successions are rarely simple choices between selling a business and passing it down. In practice, the most successful transitions unfold over years, and their success is measured by more than financial outcomes.
“People often think of business succession as a transaction,” says Business Owner Advisory Strategist Steve McConley of Wells Fargo’s Wealth & Investment Management, Wells Fargo Clearing Services, LLC. “But it’s often a multistage process that can play out over a decade or more.”
The earlier business owners begin, the more options they typically have — from staged liquidity events to tax-advantaged transfers — while also preparing the business itself.
Many businesses are closely tied to their founders, which can limit both transferability and long-term sustainability. Reducing that reliance by strengthening management teams and building independent operations is often a critical step, whether the business stays in the family or transitions to new ownership. If the next generation is expected to step in, preparation takes time.
“You really can set your kids up for failure if you expect them to jump in and get it done,” McConley says. “They need time, preparation, and relationships with stakeholders.”
Before focusing on structure, valuation, or tax strategy, business owners should begin with a more fundamental question: Does the next generation actually want the business?
Rather than assuming continuity, families are increasingly engaging in structured conversations, often with the help of advisors and family dynamic specialists, to understand each heir’s interest, readiness, and role.
Business Owner Advisory Strategist Eric Smith in Wealth & Investment Management, Wells Fargo Clearing Services, LLC, notes that these decisions are often clearer when viewed in the context of the broader financial picture. In many cases, separating ownership, governance, and leadership helps families to preserve the value of the business without requiring every family member to participate in its day-to-day operations.
Without clarity, assumptions can quietly shape decisions, creating risk for both the business and the family.
Succession planning becomes more complex when multiple family members are involved, particularly when only some want to lead the business.
“You don’t want your children or grandchildren to be estranged,” McConley says. “You want to do this in a way that Thanksgiving will continue to be a family holiday.”
Achieving balance often requires looking beyond the business itself. Smith emphasizes that the operating company is just one part of a broader balance sheet. Other assets — such as real estate, investment portfolios, or trusts — can help create equity across heirs, while governance structures like dividend policies or buy-sell agreements can help prevent future friction.
Equally important is communication. Clear expectations that are established early and reinforced over time can help preserve both family relationships and long-term value.
Once aligned on goals, business owners can evaluate a range of transition paths.
For those not passing the business to family, that may mean preparing for a sale by strengthening operations, clarifying financials, and positioning the business to help maximize value. Others may consider employee stock ownership plans (ESOPs), which can provide liquidity while allowing the business to continue operating independently and preserving its culture.
For families who want the business to continue benefiting future generations, trust structures can offer a tax-efficient way to transfer ownership while introducing professional oversight. In these cases, a corporate trustee may help manage business interests, balancing long-term stewardship with the complexity of family dynamics.
“In some cases, the goal is not just to transfer ownership, but to ensure the business continues to benefit the family over time,” says Denise Wyatt, head of Closely Held Asset Management with Wealth & Investment Management, Wells Fargo Bank, N.A. “A trust structure, supported by a corporate trustee, can help provide that continuity while bringing professional management and oversight to a complex asset.”
Even when a successor is not in place, contingency planning remains critical. Establishing a framework for leadership transitions or potential sale scenarios can help ensure continuity in the face of unexpected events.
Across each of these paths, tax efficiency remains a central consideration, particularly for high-net-worth families, where the structure and timing of a transition can significantly shape long-term outcomes.
Ultimately, succession planning sits at the intersection of financial strategy and family legacy. The most effective plans generally reflect alignment across both, supporting the continued success of the business, preparing the next generation, and preserving family relationships.
Because in the end, the question is not just how to pass on a business. It is how to help ensure that today’s decisions create lasting opportunity for generations to come.
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Wealth & Investment Management (WIM) offers financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Bank products and services are available through Wells Fargo Bank, N.A.
Wells Fargo Trust is a part of WIM and offers services through Wells Fargo Bank, N.A. and Wells Fargo Delaware Trust Company, N.A.
Wells Fargo & Company and its affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.
