Succession Planning: What’s at Stake for Family Businesses

There is a gap between what family businesses believe about succession planning and the actions they actually take. This gap can unintentionally create paralysis during a time of tremendous opportunity for leadership action.

At private family enterprises and offices, succession planning is a nonfinancial item with potential for substantial financial consequences. Leadership decisions may shape liquidity, taxes, investment confidence, and even long-term organizational value.

A September 2025 survey of 300 U.S. family-business executives and owners found that more than three-quarters of respondents (85%) said succession planning is important for long-term success, but only 57% reported having a CEO succession plan. Perhaps more notable to eventual transition success: only 23% said a plan is actively being implemented and 30% described their succession planning as “behind schedule.”¹

This gap between belief and action matters because succession outcomes can be costly. One estimate shows that failed CEO and C-suite succession costs close to $1 trillion per year for the S&P 1500.²

That gap can unintentionally create paralysis during a time of tremendous opportunity for leadership action. A great wealth transfer is occurring alongside macroeconomic volatility that may swiftly open and close windows for new and complex investment journeys. At the same time, organizations may be working through technological transformation. For example, about 80% of local Philadelphia firms report using AI.³

From the finance perspective, there are some considerations that may help drive intention to action:

• Treat succession planning as part of crisis planning. No one wants an emergency succession situation, but planning for it can mitigate risk such as liquidity for potential tax obligations.
• Recognize the value of understanding and protecting long-term financial strategy during such a transition. Capital allocation trade-offs may be part of strategies that benefit from continued consistency, particularly during a transition that could experience some turbulence on fronts unrelated to finance.
• Make financial training a part of successor elevation. Successors who are brought into the role quickly may inherit complex decisions—ranging from a private equity process to other major transactions. Fostering financial leadership early can reduce risk later.

Recognizing the need for succession planning can open up conversations, but the process can be hampered due to decisions that are personal and complex.

My colleague David Dotson, managing director at Deloitte Tax LLP, shared that this is where governance may help. A board of directors, family council, or advisory board may offer a forum for accountability. This may include steps such as:

• Encourage a stewardship mentality: A leader’s unwillingness to relinquish control may be overcome by a shift to legacy planning for an entity. As noted above, those rising to leadership roles may benefit from understanding long-term strategies and technical aspects of work underway.
• Advance the conversation by exploring options: Discussions regarding family or nonfamily successors that track the benefits and risks of each may allow some time for reflection. Tracking these two paths over multiple conversations may drive open dialogue that is clear and direct, grounded in a trust-based decision-making process.

Given that 78% of respondents anticipate a CEO transition within the next 10 years and 42% expect one within three to five years, succession planning may be less about a distant, hypothetical future and more about near-term resilience and readiness.

CPAs and finance leaders can help clients move from informal intention to an actionable plan. What may begin as a conversation on organizational structure may ultimately impact financial outcomes and long-term value.

¹ Family Business Succession Planning Guide | Deloitte US

² Claudio Fernández-Aráoz, et. al., "The High Cost of Poor Succession Planning," Harvard Business Review (2021).

³ State of the Economy Survey Results, conducted by the Federal Reserve Bank of Philadelphia (Jan. 14, 2026), p. 21.

Sandy Pfeffer is the Greater Philadelphia marketplace leader for Deloitte LLP. Pfeffer is a member of the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants and is a CPA licensed to practice in Pennsylvania and New Jersey. She can be reached at spfeffer@deloitte.com.

This article contains general information only and Deloitte is not, by means of this article, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this article. Copyright © 2026 Deloitte Development LLC.

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