Business owners are risking substantial problems for their business partners and family by failing to make a will.

Serious complications can arise in a business if succession planning for director shareholders does not include a well thought out will. Why? A well drafted will can limit the potential for claims against the deceased’s estate. This, of course, includes claims made against the deceased’s share in a business. If there is no will, your business could suffer serious damage.

Businesses need to ensure their directors have wills and that these meld with articles of association, and, or shareholder agreements. Further, many businesses are family run with the intention that the business should pass to another family member working in the firm. Often a child working with a parent in the family business will have an expectation that the business will come to them. Where this is not covered by a will, or if the articles of the business allow for another shareholder to buy the deceased’s shares, disputes could easily occur. The child working in the business may be expected to purchase their siblings interest even if the other siblings have never worked in the business or contributed to its success.