In recent years, Tilly, Bailey and Irvine has seen a substantial increase in contentious probate work – disputes regarding wills and estates. Perhaps surprisingly, they can have a major impact on businesses.
Alison Leith – partner and head of Commercial Dispute Resolution, based at the firm’s Wynyard office – says planning can ensure that disputes are avoided or at least their impact minimised.
She told Tees Business: “People think probate disputes are purely personal, but they often affect businesses – not just financially but also the day-to-day running of them. We find that many people in SMEs and owner-managed businesses don’t plan for such events, but they should.
“If not specifically dealt with otherwise, a shareholding will form part of a deceased’s estate and pass in accordance with their will or the intestacy rules. This could lead to someone with no prior involvement in the business having a major interest, family members could be burdened with decisions and responsibilities for which they are not equipped. Disputes also arise as to the value of the shareholding.
Draw up a shareholders’ agreement setting out what you agree should happen to the shareholding on death. For example, it could provide for other shareholder(s) to have first option to buy it, with a means of calculating the price.”
“Also, consider the company’s Articles of Association. Many companies have Table A or model Articles and no prior consideration has been given to what should happen in the event of death. These can be amended to reflect the shareholders’ wishes to ensure that the business can continue to run without unnecessary issues at what would already be a very difficult time.”
Just doing those basics, says Alison, can head off damaging disputes down the line. But what if the feared dispute becomes reality?
She said: “Speak to a specialist to assess the legal position and see if there is a route through. Going to court is the absolute last option. It’s costly, disruptive and time-consuming, and is stressful at any time but especially following the death of a close colleague or family member.”
In summary, she emphasises: “Prevention is better than cure. At TBI we have specialist corporate and probate teams who can help you to plan for the worst. If a dispute arises, my team is experienced in both business and probate disputes and ideally placed to advise and assist in reaching a resolution or, in the worst case, preparing your case for trial”
For more information, or to speak to Alison, contact us today on 01740 646000 or fill in an online enquiry form and someone will be in touch.
Call: 01740 646000