Written by Daniel Cotter
Ward Goodman
July 15, 2025
Running a business means juggling countless responsibilities. But there’s one area too many business owners leave on the back burner: what happens to your business if you’re suddenly not around to run it?
Estate planning isn’t just for retirees or the ultra-wealthy. It’s a vital step for anyone with a business to protect. If your company is a key part of your family’s income, your team’s livelihood, or your long-term legacy, having a proper plan in place could make all the difference.
What Happens If You Die or Become Incapacitated?
Without a plan, the future of your business can quickly become uncertain. If you were to pass away or lose mental capacity, your business might face:
- Frozen accounts or legal delays due to lack of legal authority. If no one is legally authorised to act on your behalf, banks may freeze access to business funds and other assets, causing immediate operational issues.
- Unintended ownership passing to family members with no experience or interest in the business. This could put your company in the hands of someone unable or unwilling to manage it.
- Disruption to operations, damaging your business’s value and reputation. Without clear leadership, staff may feel uncertain, clients may lose trust, and the business may stall.
- Internal conflict or forced sales, especially in family-run or closely held businesses. Disagreements over ownership or future direction can lead to legal disputes or the need to sell the business under pressure.
There’s no doubt that it is a difficult topic to confront, but planning now prevents even tougher conversations later.
Wills, LPAs and Business-Specific Protections
When it comes to protecting your business from the unknown, a basic Will alone isn’t enough. A well-rounded estate plan should address both your personal and business interests. Here are some of the key elements that every business owner should consider:
- A professionally written Will that clearly outlines what happens to your business shares and assets.
- A Lasting Power of Attorney (LPA) that appoints someone to step in and make financial decisions on your behalf if you’re unable to.
- Business LPAs, specifically naming someone with experience to manage operations during periods of incapacity.
- Trusts, which can keep your business running while protecting family interests, especially useful when not all family members are involved in day-to-day management.
Avoiding Forced Sales: Cross-Option Agreements
A cross-option agreement is a legal arrangement between business co-owners that sets out what happens to a person’s shares if they die. It gives the surviving shareholders the option to buy the deceased’s shares – and the deceased’s estate the option to sell them – without forcing either party. This ensures that control stays with the remaining business owners while the family receives fair value.
If you co-own your business, a cross-option agreement will ensure that:
- Surviving shareholders have the option to buy the deceased’s shares.
- Family members receive the value of the shares without having to take on a business they’re not equipped to manage.
These agreements are usually backed by life insurance policies to provide the necessary funds for a smooth transition. Without them, surviving partners may not be able to afford the shares – or worse, control could pass to unintended parties.
Balancing Family Needs and Business Continuity
What if one child is involved in the business, but another isn’t? What if your spouse depends on the income, but doesn’t want to take on operational duties?
Estate planning allows you to:
- Ring-fence ownership and control for those best equipped to run the business.
- Provide financial support to others through trusts or income distributions.
- Avoid family conflict by setting clear intentions in advance.
The key here is fairness, not necessarily equal distribution. With expert guidance, you can structure your plan to support your family while preserving the business’s health.
Protecting the People Who Depend on You
Another important consideration is Key Person Insurance. This type of policy provides a financial safety net if a vital team member becomes critically ill or passes away. For many businesses, losing a founder or senior decision-maker could mean a loss of income, client relationships, or operational knowledge. Key Person Insurance ensures the business has the funds to cope, whether that means hiring a replacement, covering lost profits, or easing cash flow.
We’ve written more about how it works and who should consider it in our recent article: Key Person Insurance Explained.
Your team, your clients, and your co-owners rely on the business continuing to function. Planning ahead ensures continuity not just for your family, but for your wider circle of stakeholders.
A few simple steps now can spare your loved ones unnecessary stress and legal wrangling down the line. And just as importantly, it gives you complete peace of mind today.
Plan for the Future with Ward Goodman
At Ward Goodman, we understand the unique pressures that business owners face. Our estate planning experts work closely with you to build a plan that protects your business, supports your family, and reflects your wishes.
If you’re ready to safeguard your legacy, get in touch with our team for a confidential conversation about how we can help you plan for the unexpected and protect what matters most to you.
