Legend has it that there was once a British monarch named Leir who, at an advanced age, decided to partition his kingdom among his three daughters to ensure a peaceful and harmonious transfer of power.

Leir wanted only one thing from each of his offspring - a profession of their love for him.

The two older siblings, Goneril and Regan, gladly flattered the old man, but Cordelia, who genuinely loved her father, refused to participate.

Enraged, Leir disowned Cordelia. He split the kingdom between the power-hungry older sisters and inadvertently unleashed a tragic set of events.

Many of us are familiar with this story thanks to Shakespeare, who used it as the basis of King Lear, one of his greatest works.

By the end of the play, Goneril and Regan have gone to war against each other. Lear is blind, half-mad and roaming his former lands with a fool.

Cordelia eventually reclaims the throne and begins to restore order, but by then the stage is littered with bodies and spattered with blood.

King Lear is a story of succession planning gone wrong and it is as relevant today as it was when first performed in the early 1600s.

Here's why. Due to the aging of the population, the country's business community is on the cusp of the biggest intergenerational transfer of wealth in Canadian history.

Some studies have estimated that between now and 2015, business assets worth $10 billion will change hands.

"In the next 10 to 15 years," says Lawrence Barns, chief executive officer of the Canadian Association of Family Enterprises (CAFE), "succession will be the biggest single issue facing small and medium-sized enterprises."

A recent study conducted by PricewaterhouseCoopers (PwC) suggests that business owners are poorly prepared or not prepared at all.

PwC found that 54 per cent of proprietors of private companies do not have a succession plan. That figure rises to over 70 per cent for companies with sales of less than $10 million annually.

Janice Kelner, the Calgary-based director of PwC's centre for entrepreneurs and family business, has heard stories of spouses inheriting a business and not knowing where to find the keys that open the front door.

She has seen family enterprises transferred to the children before they are old enough to operate them successfully. "If the owner passes away suddenly, it can throw the company into chaos," says Kelner.

There is, in fact, no end to the ways succession can go wrong and that's why the current lack of preparation among small to medium-sized business owners is so worrisome.

"A large number of businesses fail when they reach the point of transition from one owner to another," says Kelner. "It's a concern for the whole economy because privately owned small businesses are major employers."

There are two basic rules business owners ought to follow when planning for succession.

First, start early, at least five years or, better still, 10 years before a planned retirement date, according to Kelner. Second, find a good adviser, especially if family members are involved in the business and expect to run it, or at least play a role in the future.

Barns says that CAFE advises its members, who number about 1,000, to find someone whom they can designate as their most trusted adviser.

This person could be a lawyer or an accountant, and must enjoy the confidence of both the owner and potential successors.

He or she should be capable of running meetings with all the principles and dealing with what Barns calls the soft-tissue issues.

Such as: How does a father tell his first-born son that he will have a minor role, that a younger brother is going to take over and that a sister will be the second-in-command? How can such a transition be managed without tearing the family apart?

Barns adds that CAFE has been advising its members on succession planning since the organization was formed in 1983.

As a result, some 70 per cent of its members have plans in place, while 30 per cent are unprotected, which is the reverse of the economy as a whole.

But he is hopeful that that is beginning to change.

Earlier this summer, he was invited to speak about the issue in Edmonton at the annual conference of the Canadian Association of Roofing Contractors, a good sign that awareness of the importance of succession planning is increasing.

Still, thousands of business owners are leaving to fate the future of their companies and the wealth they have accumulated through a lifetime of hard work.

Many of them will muddle through succession and realize some of the value that resides in their companies.

Too many, unfortunately, will end up like poor King Lear - beggared and driven to distraction by a transition gone wrong.

(D'Arcy Jenish can be reached at jenish@businessedge.ca)