"Mom Owned the Business… Now What?" - Why New York Business Owners Need a Succession Plan
Baby Boomers in New York are leaving behind businesses — not just assets. Learn what happens to a business when the owner dies, and how business succession planning protects your family and your legacy.
When a business owner dies without a plan, the question left behind is one many New York families quietly struggle with:
“Mom owned the business… now what?”
Baby Boomers are leaving behind more than homes and retirement accounts — they’re leaving behind small businesses. In fact, nearly 40% of small businesses nationwide are owned by Baby Boomers, many of whom are now retiring, aging, or passing away without a succession plan in place. That’s creating a quiet crisis for the next generation.
Here in New York, small businesses are deeply woven into the fabric of our communities — from family-owned restaurants in Saratoga Springs to longtime contractors in Albany and solo professionals in Schenectady. But when a business owner dies without a plan, what’s left behind can be overwhelming. Adult children — often with careers and families of their own — are suddenly expected to make decisions about running, selling, or dissolving a business they may have never been involved in.
What Legally Happens to a Business When the Owner Passes?
The answer depends on three main factors: the type of business entity, the owner’s estate plan, and whether there are internal business agreements in place.
If the business was a sole proprietorship — meaning it wasn’t incorporated or operated through an LLC — it effectively ends when the owner dies. The business itself has no legal existence apart from the owner. Equipment, inventory, and client lists become part of the owner’s estate and must go through the probate process in New York Surrogate’s Court, which often takes many months or even years.
For businesses organized as LLCs or corporations, ownership interests (such as membership units or shares) can pass to heirs under the terms of the owner’s Will or, if no Will exists, through New York’s intestacy laws. However, this transfer of ownership does not automatically give heirs the knowledge, authority, or desire to manage the business. And without a well-drafted operating agreement or buy-sell agreement in place, disputes and delays can quickly arise — both among family members and with any surviving business partners.
The Cost of Not Planning
When a business owner hasn’t created a succession plan, the fallout can be financially and emotionally costly. The business may be frozen during the probate process, leaving employees, clients, and vendors in limbo. Valuable assets might be liquidated at a discount just to settle debts or taxes. Surviving partners may find themselves tied to new co-owners they never chose. For families with larger estates, the New York estate tax (which kicks in for estates over $6.94 million in 2025) can further reduce what’s left for loved ones.
And beyond the financial consequences, there’s often emotional stress. Without guidance, families are left wondering whether to keep the business, sell it, or shut it down — a decision that’s especially painful when it’s tied to a loved one’s legacy.
How Business Succession Planning Makes the Difference
A clear, legally sound succession plan answers those questions before they ever need to be asked. It allows business owners to decide who should inherit the business, who should have the right to buy it, how the business will be valued, and how their family will be protected.
There are a number of tools that can be used in New York to accomplish this, including trusts, operating agreements, shareholder agreements, and buy-sell agreements funded with life insurance. With proper planning, business owners can ensure their company continues in the right hands — or is sold under terms they choose — rather than leaving loved ones to guess or fight it out in court.
It’s Not Just About Business — It’s About Legacy
Creating a succession plan isn’t just about protecting the bottom line. It’s about protecting your family, your employees, and the years of hard work you’ve poured into building something that matters. It’s about turning uncertainty into clarity and leaving a legacy you can be proud of.
Whether you’re a business owner ready to plan ahead or someone who’s unexpectedly inherited a family business, you don’t have to navigate this alone.
At Harris-Pero Law Firm, we help New York families design smart, customized business succession plans that protect what you’ve built, provide for your loved ones, and preserve your legacy.
Ready to plan for the future? Contact us to start the conversation.