By Monette Malewski
Running a business is never just about profit margins or hitting quarterly goals. It’s about building something enduring, something that outlives the hustle of day-to-day operations. Yet, one of the most overlooked aspects of ensuring that legacy is business succession planning. I’ve spent many years helping Montreal entrepreneurs and business owners craft plans that safeguard their hard work, and let me tell you, without a plan, the future of your enterprise—and the financial security of your loved ones—hangs in a precarious balance.
What Happens Without a Business Succession Plan?
Too many times, I’ve sat across from business owners who said they simply “hadn’t gotten around to it.” Between client acquisition and managing operations, their lives were busy enough. They would simply deal with succession planning later. They also had faith that goodwill and verbal agreements would be enough to sustain their businesses if the unthinkable happened. Unfortunately, this approach almost never works out.
One client, a brilliant entrepreneur, trusted his silent partner—his own brother—to handle his paperwork. Years later, I reviewed their shareholder agreement, only to find clauses that would have handed over the business to the brother’s family upon the entrepreneur’s death (it turns out, this was an intentional act of deception). One stroke of misfortune, and the legacy he’d built could have been gutted. Needless to say, the two brothers are no longer talking.
If you own a business, succession planning isn’t optional. Whether you’re the sole proprietor of a small business, a partner in a thriving firm, or the head of a multi-generational enterprise, the need for a clear, actionable succession plan is universal. Every business owner, no matter how successful or secure they feel today, must address the inevitable. Without a succession plan, you’re risking everything for those who rely on your business, from employees and clients to your own family.
Beyond Wills
A will is an important start, but it’s a single piece of a much larger puzzle. I always tell my clients, “If something happened to you yesterday, does your current plan reflect your wishes?” That jarring “yesterday” perspective forces action, especially when clients realize that a will alone doesn’t address potential scenarios like disability, disputes, or sudden deaths.
Families often face even tougher scenarios. Do you want your brother’s spouse or your sister’s children owning half of your company? I’ve asked this question countless times, only to watch the realization dawn on people’s faces. You might love your nieces and nephews, or your brother- or sister-in law, but that doesn’t necessarily mean you want to be in business with them.
Succession planning ensures clarity: it removes ambiguity and sets a structure that protects relationships as much as it does assets.
The Insurance Advantage: Liquidity, Protection, and Legacy
Here’s something not everyone realizes: life insurance is one of the most powerful tools in a succession plan. In Canada, life insurance payouts are tax-free, making them an indispensable resource for funding buy-sell agreements, covering estate taxes, or simply ensuring liquidity when it’s needed most.
A client of mine, a visionary business founder, faced a devastating challenge when his partner and co-owner passed away unexpectedly in the middle of a buyout process. It was a moment fraught with risk—without proper planning, the business could have been thrown into chaos. Thankfully, years earlier, I had worked with them to implement life insurance policies as part of their broader business succession plan. Those policies provided the liquidity needed to buy out the deceased partner’s shares, ensuring the company could remain financially stable and operational without draining its reserves.
Years later, the value of this foresight became evident again when the founder himself passed away. Thanks to the same strategic planning and life insurance solutions, the business avoided financial distress, stayed on solid footing, and provided for the next generation.
Another advantage of life insurance lies in its borrowing potential. Businesses can leverage the cash value of certain life insurance policies to secure loans, providing a flexible source of funding for expansion, new projects, or emergency business needs. By using the policy as collateral, companies can access funds without tapping into other assets or disrupting operations. This financial versatility makes life insurance an often-underestimated tool in strategic planning.
Insurance can also equalize estates. Let’s say you’re leaving the business to one child and not the other. How do you ensure fairness? Life insurance provides liquidity to compensate non-business heirs, keeping harmony in the family and focus in the business.
The Invisible Threat: Disability and Its Fallout
While death looms as an obvious concern, disability is often the silent risk that nobody prepares for. Statistics don’t lie: you’re far more likely to face a disability before age 65 than to die. Yet, I see so many businesses without a safety net in place.
Two brothers I worked with ran a thriving operation together. Disability insurance became a critical component of their buy-sell agreement. When one of them faced a serious health issue, the insurance ensured his salary continued while the business stayed operational. They didn’t lose momentum—or each other’s trust.
This isn’t hypothetical. It’s reality. Disability insurance allows businesses to maintain operations, hire replacements, and cover gaps during unpredictable transitions.
Key Person Insurance: Protecting Your Revenue Engine
Businesses often have one or two “key people” whose absence could shake the very foundation of operations. Key person insurance safeguards against that risk, providing the financial cushion to weather storms.
I worked with a company where a top salesperson—the kind who single-handedly drove revenue—unexpectedly passed away. With a $1 million key person policy in place, the business had time to recruit and train a successor while keeping operations stable. That’s the kind of forward-thinking protection that ensures businesses survive shockwaves.
Collaboration Is the Heart of Planning
Succession planning isn’t a solo endeavour. It requires input from lawyers, accountants, and advisors—a full-circle team effort. In many cases, I find myself quarterbacking this process, ensuring alignment between all parties and translating the client’s goals into actionable plans.
One client had a habit of procrastination, relying heavily on their accountant, who was perpetually overwhelmed. I stepped in, coordinated meetings, reviewed agreements, and updated policies. “If it wasn’t for you, we’d still be exposed,” the client told me later. That’s the essence of what we do: turning “good intentions” into real protections.
Succession Is Personal, Not Just Practical
It’s easy to get lost in the numbers, but succession planning touches something deeper. It’s about values, relationships, and what you’ll leave behind. I encourage clients to write a letter alongside their will, expressing their hopes and lessons for future generations.
A business succession plan should reflect more than spreadsheets. It should tell your story, honour your achievements, and carry forward your principles.
Start Today: Tomorrow May Be Too Late
Every plan begins with a conversation. Whether it’s reviewing shareholder agreements, implementing insurance, or clarifying estate plans, the first step is always the hardest. But once you take it, you’ll sleep easier knowing your business—and your family—are protected.
Your legacy deserves more than assumptions and trust falls. It deserves a solid plan. Let’s start building it today.
Monette Malewski is the President and CEO of M Bacal Group. Her mission is to help clients protect their legacies and grow their businesses while navigating the unpredictable challenges of tomorrow.
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