When Succession Planning works on paper but not in reality

On paper, succession planning promises clarity, continuity and reassurance. Ownership is mapped out, control is allocated, and the future appears settled. In reality, however, succession often exposes the very tensions the documents were meant to avoid.

Many families and business owners are surprised by this. They have done what they were advised to do. The shareholders’ agreement has been updated. The wills and trust documents are carefully drafted. Professional advice has been taken. Yet when succession is tested — by retirement, illness, incapacity or death — plans that once felt robust begin to strain.

The difficulty is not usually technical. It is human. Succession planning sits at the crossroads of family relationships, identity, power and money. Legal documents provide structure, but they cannot manage emotion, unspoken expectations or changing dynamics over time.

This article explores why succession planning so often works on paper but not in reality, and what families and business owners in England and Wales should understand before assuming the job is done.

Succession Planning Is a Human Process, Not a Paper Exercise

Legal documents are designed to reduce uncertainty. They define rights, responsibilities and outcomes with precision. Succession planning, however, operates in a space where certainty is elusive.

For founders and senior family members, succession can feel like a loss of relevance, authority or purpose. For the next generation, it can trigger anxiety about legitimacy, competence and comparison with siblings. For spouses and non-working family members, it may raise concerns about security or influence.

These responses are rarely articulated during planning. They tend to surface later, when succession becomes imminent and emotions run higher. By then, documents may be relied upon to resolve issues they were never designed to manage.

Good drafting is essential, but it cannot replace trust, readiness or mutual understanding.

The Illusion of “We’ve Covered That”

A common assumption is that once the legal framework is complete, succession planning is finished. In practice, documents often address structure while leaving behaviour unexplored.

A shareholders’ agreement may determine who inherits shares but say little about how decisions will be made when family members disagree. A partnership deed may anticipate retirement without addressing resentment about timing or valuation. A trust structure may protect assets while quietly sidelining individuals who expected a greater role.

Because these issues do not appear as legal flaws, they are easy to overlook. They only become visible when the plan is relied upon - often at moments of stress or vulnerability -when flexibility is limited and positions are entrenched.

Family Roles and Business Roles Rarely Align

Many succession difficulties arise from the assumption that family equality and business effectiveness are the same thing.

In family enterprises, roles often develop informally. One child becomes closely involved over time. Another pursues a different career but still expects equal ownership. A spouse who has never held a formal role nonetheless influences key decisions.

Succession planning requires these informal arrangements to be formalised, and that process can be uncomfortable. Not all family members want to run the business. Not all who want to run it are suited to do so. Treating everyone the same can feel fair, but it may not be sustainable.

Where these distinctions are avoided for the sake of harmony, conflict is often deferred rather than resolved. Where they are imposed without explanation, they may feel arbitrary or hurtful. Neither outcome is addressed by drafting skill alone.

Timing Is Almost Always Misjudged

Succession plans tend to be created either too early or too late.

Plans made early can become outdated as businesses grow, family circumstances change and relationships evolve. Plans made late are often rushed, driven by declining health or external pressure, leaving little time for discussion or adjustment.

In both cases, succession is treated as a single event rather than an ongoing process. Documents are signed at a moment in time, but succession unfolds over years. Without regular review, even well-designed plans can drift out of alignment with reality, creating confusion or resentment when they are finally relied upon.

Silence Is Often Mistaken for Agreement

Many families assume that a lack of objection means acceptance. In reality, silence often reflects discomfort, deference or fear of upsetting an existing balance.

Younger family members may hesitate to challenge decisions made by parents or founders. Non-working spouses may feel excluded from conversations framed as “business matters”. Siblings may disagree privately while presenting a united front.

This silence can persist for years. When it breaks — often during a crisis — conflict can appear sudden and disproportionate, despite having been quietly building beneath the surface.

Relinquishing Control Is Harder Than Anticipated

Succession plans frequently assume that authority will transfer smoothly once formal milestones are reached. In practice, control is often relinquished gradually, inconsistently or reluctantly.

Founders may retain informal influence long after stepping back on paper. Decision-making may remain centralised despite changes in title or ownership. This can undermine successors, erode confidence and create frustration on all sides.

Documents can allocate authority, but they cannot create emotional readiness. Where this is not acknowledged during planning, successors may inherit responsibility without real autonomy — a situation that benefits neither the family nor the business.

When Legal Structures Exacerbate Conflict

Paradoxically, legal mechanisms designed to protect family enterprises can intensify disputes when behavioural dynamics are ignored.

Deadlock provisions, valuation clauses and forced sale mechanisms can become tools of leverage in family disagreements. Trust structures intended to provide flexibility may be perceived as opaque or controlling. Minority protections can harden positions rather than encourage collaboration.

Once conflict emerges, parties often retreat into legal positions, using documents defensively rather than constructively. At that point, succession planning has effectively failed, even if the paperwork remains technically sound.

Why Litigation Rarely Fixes Succession Problems

When succession disputes reach court, families often hope for clarity and closure. What they frequently encounter instead is delay, expense and emotional exhaustion.

Courts can interpret documents and enforce rights. They cannot repair relationships, rebuild trust or design workable governance arrangements for the future. Even a legally successful outcome can leave lasting damage to both family and business.

For this reason, effective succession planning aims to reduce the likelihood of litigation rather than merely preparing for it.

What More Resilient Succession Planning Looks Like

Succession plans that endure tend to be treated as living arrangements rather than static documents. They are reviewed regularly. They distinguish clearly between ownership, management and benefit. They incorporate governance structures that support communication and accountability.

Crucially, they create space for difficult conversations before decisions are fixed in legal form. This may involve staged transitions, facilitated family discussions or agreed dispute-resolution mechanisms.

The law provides the framework. The process provides the resilience. Succession planning benefits from attention well before a triggering event forces action. Indicators that further advice may be helpful include uncertainty about roles, unequal involvement of family members, unspoken tensions or discomfort discussing the future openly.

Early advice is almost always more cost-effective than resolving disputes after relationships have broken down.

Final Thoughts

Succession planning is not just a test of drafting sophistication. It is also a test of whether legal structures have been designed with a realistic understanding of family behaviour, business evolution and human emotion.

Plans that work on paper do not always survive contact with reality. Recognising that distinction early can make the difference between continuity and conflict.

Eddison Cogan Lawyers advises families and business owners on succession planning that works in practice, not just on paper. If you are reviewing an existing plan or considering the future of a family enterprise, a measured legal conversation can often bring clarity before difficulties arise.