March 2nd, 2026
As a business owner, your to-do list is never-ending. Between serving clients, administrative tasks, networking, and staying current on continuing education, it’s easy for long-term planning to slip to the bottom of the list. At the same time, it’s difficult to imagine a time when you actually put your pen down, so to speak, and step away from your business. But waiting until that day to consider succession planning almost guarantees a disorganized and stressful transition. Whether you expect to retire in 20 years or you’re already considering a sale, early succession planning protects the value of your business and ensures a smooth transition for the people who rely on you.
In this first post of a Succession Planning Series, we’ll explore why establishing your succession plan early is essential to protecting your business’s future.
As tax practitioners, we operate in the client service industry, which means our business is built largely on client trust, relationships, and continuity. These elements are all centered around the business owner. Now, ask yourself what happens when you take yourself out of the equation. Is it possible for your business to continue operations as it is without damaging all the hard work you spent years building?
A clear, established succession plan ensures your business’s interests and integrity are protected even after you’ve stepped away. Even if retirement is years away, emergencies can happen without warning. Having a plan for the future ensures you’re not only prepared for the unexpected but also able to make strategic decisions instead of reactive ones.
Failing to create a plan comes with risks. A poorly managed transition can cause client disruptions and reflect poorly on your business. Without clear guidance on who clients should contact or a proper introduction to your successor, clients may feel confused or uncomfortable, undermining their trust in your company. Disorganization during a transition increases the risk that client requests go unanswered or ignored altogether, further damaging your business’s reputation.
Compliance issues are another concern. While deadlines may be the bane of every tax professional’s existence, an unorganized transition runs the risk of obligations falling through the cracks. It may delay client deliverables or lead to missed filing deadlines. Additionally, granting the wrong person improper access to sensitive client information jeopardizes internal controls and confidentiality requirements.
As tax professionals, we can’t forget about income, gift, and estate taxes. Neglecting to consider them in advance can lead to unexpected costs that may impact your financial position. Additionally, if potential buyers learn that your business is not set up for an organized transition, it can devalue your company, leaving you with less money than your business may merit.
Accounting industry trends also pose a potential problem for succession planning. More and more accounting practice owners are nearing retirement age, but with less young talent joining the profession, it may be difficult to find a competent and trusted accountant to take over your business. It may only prove more challenging the longer you wait to develop your plan.
A documented succession plan ensures business continuity. It reassures clients, staff, and stakeholders that your business will remain consistent even without your direct involvement.
As a tax professional, you likely have a well-established client base that is accustomed to dealing directly with you for their tax compliance needs. Introducing clients to your successor in advance gives them time to adjust and build confidence in the new working relationship. Protective planning enables this kind of transition and reduces the risk that clients will lose trust in your company and move their business elsewhere.
A plan also protects and preserves the legacy that you worked so hard to build. It can clearly communicate your values and goals, ensuring they remain intact even when you are not directly overseeing the business.
While it sometimes feels like we’ll all be working forever, there will come a time when you step away from your business. Retirement is often considered the primary exit motivation, but there are other reasons tax practitioners choose to step away. Reasons may include:
• Lifestyle: retirement, health concerns or emergencies, change in priorities
• Financial: goals reached, financial instability, lucrative offers from buyers
• Business circumstances: internal disputes, conflicts of interest
Regardless of the reason, planning early gives you more control, more options, and better outcomes.
Even if retirement is far off, every tax practice needs a death-or-disability contingency plan. Sudden incapacity or death can create confusion for clients, staff, and family members that may expose the practice to serious compliance risks.
A well-designed contingency plan ensures that if you or a business partner suddenly becomes unable to continue providing services, the business can continue operations with minimal disruption. It is a best practice to review the plan annually or every few years to ensure it remains current and includes relevant information.
Your contingency plan should include immediate actions, including identifying who will take over your role and documenting how the business should operate in your absence. Consider creating a checklist or similar guide so your successor is aware of all their responsibilities and duties so they can step in seamlessly.
Your plan should include a list of all parties that should be informed of the change, including your current clients, staff, and stakeholders. Consider drafting a communication that details pertinent information and highlights the transition.
There are also regulatory considerations that your successor will need to be aware of, including amendments to articles of organization, notifications to taxing authorities, and licensing boards.
It is ill-advised to do business succession planning at the eleventh hour. Best practice is to begin planning 3 to 5 years before a transition, enabling a well-managed process that minimizes disruption, preserves business value, and ensures continued success.
With tax season underway, it’s a busy time of year, but is your business prepared if something unexpected were to happen to you? If you don’t yet have a succession plan, it’s important to make the time to develop one, even if retirement is still years away. A proactive plan ensures your business is ready for whatever the future holds.
In the next blog, we’ll discuss assessing your practice and the factors involved in identifying a successor.
By Ashley Akin, CPA
Sources:
• Succession Planning: What Are the Risks if You Don’t Plan Ahead | Coastal Community Bank
• Continuity Planning in Case of Accidental Death, Disability or Diminished Capacity | Hilltop Securities
Disclaimer: The information referenced in Tax School’s blog is accurate at the date of publication. You may contact taxschool@illinois.edu if you have more up-to-date, supported information and we will create an addendum.
University of Illinois Tax School is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. This blog and the information contained herein does not constitute tax client advice.
