Issue link: https://nebusinessmedia.uberflip.com/i/1547551
HARTFORDBUSINESS.COM | NOVEMBER 16, 2026 B7 Paul Kieffer, CPA/PFS, CFP, is a Senior Wealth Planner with Key Private Bank. He can be reached at Paul_B_Kieffer@keybank.com. Mark Commune Market Leader for Key Private Bank in Connecticut & Massachusetts. He can be reached at (860) 293-4146 or Mark_Commune@keybank.com. B y Connecticut & Massachusetts Key Private Bank Leader Mark Commune and Key Private Bank Senior Wealth Planner Paul Kieffer, CPA/PFS, CFP® One of the most important and often overlooked questions is whether the next generation actually wants to be involved. Assumptions can lead to misaligned expectations, particularly if roles and intentions have not been clearly discussed. Research shows that many business owners encourage the next generation to gain experience outside the family business before taking on leadership roles. This approach not only builds skills but also offers perspective that can strengthen long-term decision- making. At the same time, fairness does not always mean equal ownership. Some family members may be actively involved in the business, while others are not. Balancing these dynamics through ownership structure, compensation, or estate planning strategies requires thoughtful consideration and open communication. Moving from intention to action For business owners, the path forward does not require solving every issue at once. But it does require starting the conversation. Key questions to consider include: • Is there a documented plan for both planned and unplanned ownership changes? • Does that plan reflect the current structure and value of the business? • Are family members and key stakeholders aligned on future expectations? • Is the plan supported by a viable funding strategy? In an environment where uncertainty is a constant, taking a proactive approach to succession planning is one of the most effective ways to reduce risk. Strategic planning is not just about preparing for change. It is about ensuring that when change comes, the business is ready for what comes next. responsibilities, often while navigating financial and legal complexities at the same time. Unfortunately, these scenarios are not just theoretical. They are situations that play out in closely held businesses every year. The role of a business continuation plan At the center of effective succession planning is a business continuation plan, often formalized through a buy-sell agreement. A well-structured agreement provides clarity around how ownership interests will transfer in the event of death, disability, retirement, or sale. It establishes a framework for determining value, outlines the terms of a transaction and helps ensure that all parties, including remaining owners and family members, understand what to expect. Equally important, these agreements are most effective when developed proactively. Establishing terms in advance allows business owners to make decisions with a clear head, rather than under the emotional strain that often accompanies a sudden transition. When designed thoughtfully, a business continuation plan can: • Provide an orderly transition of ownership • Establish a mutually agreed-upon valuation • Maintain stability for employees and customers • Protect the financial interests of both owners and heirs Funding and maintaining the plan Creating a plan is only part of the process. Ensuring it can be executed is equally critical. Buy-sell agreements can be funded in a variety of ways, including cash reserves, installment arrangements, or external financing. In many cases, insurance, such as life or disability coverage, is used as an efficient funding mechanism to support a future buyout. The key is not only selecting a funding strategy but also revisiting it regularly. As a business evolves, its valuation, cash flow, and capital needs may change. Without periodic review, a plan that once seemed appropriate may no longer be viable when it is needed most. This is especially important in growing companies, where a mismatch between a buyout obligation and available cash flow can put strain on operations and limit future investment. Planning for the next generation For family businesses, succession planning extends beyond financial considerations to include leadership readiness and family dynamics. F or many business owners, day-to-day operations demand constant attention. From managing employees and customers to navigating market uncertainty, the immediate needs of the business often take precedence. Yet one of the most consequential risks a business faces is not operational but strategic: the lack of a clear plan for ownership transition. That risk is becoming more pressing. Approximately half of all small and middle-market businesses are expected to undergo some form of ownership change within the next five to 10 years, whether due to retirement, a planned sale, or unexpected events such as disability or death. For business owners across Connecticut, this reality presents both a challenge and an opportunity. Those who plan thoughtfully can protect their legacy, preserve value, and position the next generation or new ownership for success. Those who delay may leave their business and their family exposed to avoidable disruption. The rise — and gap — of succession planning On a more positive note, business owners are increasingly recognizing the importance of planning for the future. Recent data shows that, nationally, 54.1% of family businesses now have a formal succession plan in place, a significant increase from just 18% a few years ago. However, that still leaves nearly half of business owners without a documented plan. The reasons are understandable. Succession planning can feel complex, time-consuming, and uncomfortable at times. It often requires business owners to confront difficult questions: Who should take over? How should value be allocated among family members? What happens if circumstances change unexpectedly? Unlike tax filings or regulatory deadlines, there is no immediate requirement forcing these decisions. As a result, planning is often deferred—sometimes until it is too late. The cost of not planning When an ownership transition occurs without a clear roadmap, the consequences can be significant. Without a written agreement or established process, businesses may face internal conflict among owners or family members, delays in settling estates, and uncertainty that can ripple across employees, customers, and creditors. In some cases, businesses may be forced into liquidation or sale at a reduced value simply because there was no structured plan in place. Operationally, the absence of a plan can also disrupt leadership continuity. If a key owner or leader is no longer able to participate in the business, remaining partners may suddenly be forced to take on unfamiliar Strategic planning and reducing risk: Why business owners can't afford to wait The Key Wealth Institute is comprised of financial professionals representing KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA). Key Wealth, Key Private Bank, Key Family Wealth, KeyBank Institutional Advisors and Key Private Client are marketing names for KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA). Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual author(s), and may not necessarily represent the views of KeyBank or any of its subsidiaries or affiliates. This material presented is for informational purposes only and is not intended to be an offer, recommendation, or solicitation to purchase or sell any security or product or to employ a specific investment or tax planning strategy. KeyBank, nor its subsidiaries or affiliates, represent, warrant or guarantee that this material is accurate, complete or suitable for any purpose or any investor and it should not be used as a basis for investment decisions. It is not to be relied upon or used in substitution for the exercise of independent judgment. It should not be construed as individual tax, legal or financial advice. Investment products, brokerage and investment advisory services are offered through KIS, member FINRA/SIPC and SEC-registered investment advisor. Insurance products are offered through KIA. Insurance products offered through KIA are underwritten by and the obligation of insurance companies that are not affiliated with KeyBank. Non-Deposit products are: NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY ©2026 KeyCorp®. All rights reserved. CFMA #260522-4505879 S P O N S O R E D C O N T E N T 2 0 2 6 W E A LT H T R A N S F E R S U R V E Y | H B J