What Happens Without a Plan
The default outcomes are rarely what owners want. A single-member LLC can be wound down if your heirs do not act fast, Florida law generally dissolves it unless your estate continues it within about 90 days. In a multi-member LLC, your death usually "dissociates" you: your heirs inherit your economic interest (a share of profits) but not the right to manage or vote, leaving them silent owners beside your partners. Corporate shares pass through probate to your heirs. In every case, no plan means probate delay, a possible fire-sale, and disputes among family and co-owners.
The Tools That Fix It
Business succession planning is a coordinated set of moves, not one document:
- A buy-sell agreement. If you have co-owners, this is the cornerstone: who buys an interest on death, disability, or exit, at what price, funded by life insurance so the cash is there.
- Your business in a trust. A revocable trust keeps the company running and out of probate if you die or lose capacity, while you keep full control during life.
- A directed trust. Lets the family keep control of a closely-held business by separating the people who run it from the trustee who holds it.
- A dynasty trust. Passes a business down for multiple generations with creditor and divorce protection.
- An updated operating agreement or bylaws. The transfer-on-death and successor-management terms have to match your estate plan, this is where piecemeal planning breaks.
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Book your free consultPassing It to the Kids
The hardest case is when one child works in the business and the others don’t. Splitting the company equally usually breeds conflict. The common fix: leave the business to the child running it, and equalize the others with life insurance or other assets, so no one has to sell the company to be treated fairly. Gifting interests over time, a family limited partnership, or a sale to the next generation can move ownership tax-efficiently, but the family conversation matters as much as the documents.
The Tax Side
Two big levers. A step-up in basis at death revalues the business to its date-of-death value, often erasing the capital-gains tax on a lifetime of growth, so inheriting an interest usually beats being gifted it. A married couple can even get a double step-up with a Florida community property trust. And valuation discounts plus the federal estate-tax exemption shape how much, if any, tax applies. We coordinate the structure so the handoff is tax-smart. One more trap for S-corp owners: your trust has to be drafted to keep the S election, or it can terminate the moment you die. Can a trust own S-corp stock? →
Frequently Asked Questions
What Happens to My Florida Business if I Die Without a Succession Plan?
It depends on the structure, and the default outcomes are rarely what owners want. A single-member LLC can be wound down if your heirs do not act quickly, Florida law generally dissolves it unless the estate continues it within about 90 days. In a multi-member LLC, your death usually "dissociates" you: your heirs inherit your economic interest (the right to profits) but not the right to manage or vote, which can trap your family as silent owners next to your partners. A corporation’s shares pass through probate to your heirs. In every case, with no plan you risk probate delay, a forced or fire-sale, and disputes among family and co-owners.
What Is a Buy-Sell Agreement and Do I Need One?
A buy-sell agreement is a contract among the owners (or with the company) that says what happens to an owner’s interest when a triggering event hits, death, disability, divorce, bankruptcy, or a voluntary exit. It fixes who can buy, sets or formulas the price, and is usually funded with life insurance so the money is there to pay the departing owner’s family. If you have any co-owner, you almost certainly need one; without it, you can end up in business with a deceased partner’s heirs.
How Do I Pass My Business to My Children?
Carefully, and usually over years. Common tools are putting the business interest in a trust (for continuity and to avoid probate), gifting interests over time, a family limited partnership or LLC, or a sale to the next generation. The hardest case is when one child works in the business and others do not: the usual fix is to leave the business to the child running it and equalize the others with life insurance or other assets, so no one has to sell the company to be fair. We build the legal structure; the family conversation matters just as much.
Should I Put My Business in a Trust?
Often yes. A revocable living trust can own your business interest so it keeps running, and stays out of probate, if you die or lose capacity, while you keep full control during life. For more protection or multi-generation planning, an irrevocable or directed trust lets the family keep control of a closely-held business while separating management from ownership. The transfer has to be allowed by your operating agreement or bylaws and coordinated with your buy-sell, which is exactly the kind of thing that goes wrong when it is done piecemeal.
What About Taxes When the Business Passes?
Two big levers. First, a step-up in basis: assets your family inherits at your death are revalued to date-of-death value, which can erase the capital-gains tax on a lifetime of business appreciation, so inheriting an interest is often far better than being gifted it during life. A Florida community property trust can even create a double step-up for a married couple. Second, the federal estate tax (with a high exemption in 2026) and valuation discounts for minority or non-marketable interests. We coordinate the structure so the transfer is tax-smart.
When Should I Start?
Sooner than feels necessary. Most advisors suggest beginning five to ten years before you plan to step back, because grooming a successor, shifting ownership tax-efficiently, and funding a buy-sell all take time. But even if you have no plan and no time, a basic structure (a will or trust, an updated operating agreement, and a funded buy-sell) protects your family now. The free consult is a good place to start.
Common Situations
The partner’s heirs. Two friends own an LLC with no buy-sell. One dies; his widow inherits his half but knows nothing about the business. A funded buy-sell would have let the survivor buy her out cleanly. We put one in place for the others before it happens again.
The family restaurant. A founder wants his daughter, who runs the place, to keep it, and his two other kids treated fairly. We leave her the business through a trust and equalize the siblings with a life-insurance policy, so the restaurant never has to be sold to settle the estate.
Sources of Law
- Fla. Stat. ch. 605 (Florida Revised LLC Act): §605.0602 (dissociation), §605.0701 (events causing dissolution; winding up of a single-member LLC). Trust ownership: ch. 736. Step-up in basis: IRC §1014. Buy-sell valuation: IRC §2703. (retrieved 2026-06-09)
Updated on June 9, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. General information about Florida and federal law, not legal or tax advice, and no attorney-client relationship is created. Business succession depends on your entity, owners, and family. Do not send confidential information until we have agreed to represent you.