Issue link: https://nebusinessmedia.uberflip.com/i/1542283
68 HARTFORDBUSINESS.COM | 2026 BOOK OF LISTS rrlawpc.com info@rrlawpc.com (860) 278-1150 rrlawpc We extend our deepest gratitude to all our esteemed clients. Whether it's your first year or your 75th year with us, we are truly honored that you continue to choose Reid & Riege for all your general business and transactional legal needs. We would also like to express our heartfelt appreciation to our Reid & Riege friends, family, and dedicated staff for their unwavering support and tireless efforts. Our commitment to prioritizing our clients and providing exceptional service will always remain at the core of who we are and what we do. Thank you for being an integral part of our success. (Top Row) John P. Callahan, Kaitlyn S. Lagassey, John R. Ivimey, Douglas K. Knight, Ingi-Mai Loorand, Brian O'Donnell, Cathryn A. Reynolds, Adam C. Rose, Barbara A. Taylor (Bottom Row) Pamela B. Fleming, Louis J. Donofrio, Mary M. Miller, Thomas R. Kasper, Katherine E. Mulry, Jon P. Newton, Mark X. Ryan Building a Business That Outlasts You: Best Practices for Succession Planning F or many owners, the business is both their life's work and their family's most significant asset. Yet too often, succession planning is deferred until a health scare, an unsolicited offer, or a key executive's resignation forces rushed de- cisions. Thoughtful succession planning is not a luxury—it's the right thing to do for your stakeholders and the surest path to preserving value. At Reid and Riege, P.C., we see the strongest outcomes when our Business Services and Trusts & Estate teams collaborate early, aligning corporate strategy with personal wealth, family dynamics, and tax efficiency. Here are the best practices we recommend to business owners who want their enter- prise and legacy to endure. Start with the "Why," then define the "Who." Begin by articulating your objectives: Do you envision a family successor, a management buyout, a third-party sale, or a hybrid path that phases leadership and ownership succession separately? Clarifying purpose guides every down - stream decision, from voting rights to buy-sell triggers. Next, identify potential successors—family members, executives, or outside buyers—and assess readiness. If a family transition is possible, create a merit-based framework with objective per - formance criteria and clear roles for family members who participate (and equally clear expectations for those who do not). Separate leadership succession from ownership succession. Leadership and ownership do not need to change hands on the same day—or even to the same people. Governance documents can create voting and non-voting classes, indepen- dent boards or advisory councils, and defined management authorities that allow professional leadership to run the business while ownership transi- tions occur over time. This separation reduces risk, streamlines training, and maintains continuity for customers and employees. Put your plan in writing — and in the proper documents. Handshake understandings unravel under pressure. Embed the plan into corporate governance documents (oper- ating agreements, shareholder agree- ments, bylaws), employment and incen- tive arrangements (equity plans, vesting, restrictive covenants), and transaction tools (buy-sell agreements with clear valuation methods and funding). On the personal side, align trusts, powers of attorney, and other estate planning documents with the corporate structure to avoid conflicts or unintended results. Fund the plan so it works when it's needed. Succession plans often fail not because of intent but because of liquidity. If the strategy relies on deferred estate taxes or a buyout at death, disability, or retirement, ensure the funding mech- anism—insurance, retained earnings, bank financing, or phased payments— is realistic and sized appropriately. Our Business Services and Trusts & Estate teams frequently model different fund- ing scenarios in tandem with tax plan- ning to help owners choose structures that are both executable and efficient. Use governance to reduce future conflict. Good governance is preventive med- icine. Establish a board or advisory council with independent voices. Adopt policies for related-party transactions, distributions, and conflicts of interest. If family is involved, consider a family charter that addresses employment criteria, compensation philosophy, and dispute resolution. These guardrails reduce ambiguity and preserve rela- tionships during testing. Design incentives that retain and motivate key talent. Your successor will need a strong team. Equity-based incentives (actual equi- ty, options, profit interests, phantom stock, stock appreciation rights) can align management with long-term value creation without prematurely diluting control. Well-drafted restrictive cove - nants protect trade secrets and client relationships, safeguarding enterprise value during and after a transition. Plan for taxes early, not after the term sheet. Tax is not an afterthought. Thoughtful use of trusts, gifting strategies, and entity selection can mitigate estate and income taxes, but only if deployed in advance. Techniques such as grant - or retained annuity trusts or sales to intentionally defective grantor trusts may enable transfers of future appre- ciation while maintaining cash flow. Coordinating these moves with corpo- rate restructuring—such as recapital- izations, holding company formations, or spin-offs—can create flexibility without sacrificing tax efficiency. Pressure-test the plan. Run tabletop exercises: What happens if an owner dies unexpectedly? If two successors disagree? If a lender calls a covenant? If a key customer leaves? Simulations reveal operational gaps, valuation blind spots, and communi- cation needs. Update documents and insurance based on these findings. Communicate with care. A solid plan can erode if stakeholders learn about it at the wrong time or in the wrong way. Share the roadmap with your board, senior management, lenders, and family at appropriate stages. For family businesses, a facilitated family meeting can balance transparency with privacy and main- tain trust across generations. Revisit regularly. Businesses evolve; so should succession plans. We recom- mend a biennial review—or sooner after significant events such as acquisitions, leadership changes, or tax law updates— to keep documents and plans up to date. Where to begin. 1. Assess objectives and successor candidates. 2. Engage advisors early—legal, tax, valuation, and insurance—so the plan is coordinated. 3. Document governance and buy- sell terms with precise valuation and funding. 4. Align personal estate planning with corporate structure to protect family wealth. 5. Implement incentives and governance that strengthen the bench and reduce risk. Succession planning is ultimately about stewardship—of people, capital, and reputation. When approached proactive- ly, with legal and personal strategies in- tegrated, it becomes a powerful growth tool rather than an emergency fix. Our cross-disciplinary team at Reid & Riege helps owners build plans that honor the past, protect the present, and position the business—and the family—for the future. For more information on how to safeguard your business, contact us at 860-278-1150 or visit our website at www.rrlawpc.com SPONSORED CONTENT