Updated 23 October 2026
Wills - Potential Problem #32: Not Planning for Business Succession
A will can direct who inherits your business interests, but it does not provide every authority needed to keep the business operating. Business succession planning should address ownership, management and the practical handover of records, systems and responsibilities. For NSW business owners, the plan needs to work across the will, company or partnership documents, trust arrangements and key contracts.
Christine’s perspective: Leaving ‘the business’ to a child is only the beginning of the instructions. We need to identify what you own personally, who can make decisions when you are unavailable, and whether the proposed successor wants and is equipped to take over. That conversation should also cover the digital assets on which the business relies.
1. Establish what can pass through your estate
A company: the company owns its assets. If you personally own shares, those shares can generally form part of your estate, subject to applicable arrangements. A gift of your shares does not itself transfer the company’s premises, vehicles, website or bank balance into the beneficiary’s personal ownership. Check the constitution, share register and any shareholders agreement.
A sole trader: you and the business are not separate legal entities. Business assets and enforceable liabilities generally need to be addressed through estate administration. The Australian Business Register’s deceased-estate guidance explains that a legal personal representative cannot continue using the deceased individual’s sole-trader ABN. New registration and reporting arrangements may be required.
A partnership: identify the deceased’s partnership interest and review the agreement. For an ordinary NSW partnership, death generally dissolves the partnership unless the partners have agreed otherwise. Continuation, valuation and payment arrangements should be settled before a crisis. A beneficiary does not automatically become a replacement partner simply because the will leaves them an interest.
A trust: examine the deed, trustee and any appointor succession provisions. Trust property is not automatically the deceased controller’s personal estate. Shares in a corporate trustee, trust units and loans to the trust need separate consideration. The Law Society of NSW explains these different trust roles; control must be planned under the relevant documents.
2. Separate inheritance from authority to manage
An executor administers the estate. A director manages a company within the applicable corporate framework. A shareholder holds an ownership interest. These roles may be held by the same person, but one appointment does not automatically confer the others.
ASIC’s guidance for sole directors and sole shareholders explains a particular safeguard. Where the sole director and sole shareholder of a proprietary company dies, section 201F of the Corporations Act 2001 allows the estate’s personal representative to appoint a director. That person may appoint themselves or another suitable person. The executor does not become director merely by being named in the will.
Confirm the representative’s authority, appointment documents and company requirements promptly. Without an authorised decision-maker, payments and trading can be disrupted. If other directors remain, the company may continue operating under its existing arrangements; a shareholder’s death does not automatically freeze every company.
3. Coordinate the will and the business agreements
A shareholders agreement or buy–sell agreement may provide for a deceased owner’s interest to be purchased by the remaining owners. The will should work with those obligations. Otherwise, a family may expect to inherit an operating interest when the contractual arrangement instead requires a sale and payment to the estate.
Decide which events activate the arrangement, how the interest will be valued, who must buy it, how payment will be funded and what happens if payment is delayed. Consider an independent valuation mechanism and a process for resolving disagreement. Insurance may help fund a purchase, but policy ownership, recipients, exclusions and the agreement’s terms need coordinated advice.
Family succession also requires a realistic distinction between working in the business and benefiting financially. One child may manage operations while others hold shares or receive other estate assets. Equal shareholdings can create decision-making deadlock without suitable governance. Discuss voting, management appointments, distributions, exit rights and the treatment of loans between the owner and business.
4. Prepare for the first days and for incapacity
Record who can authorise payroll, contact the bank, deal with suppliers and access accounting records. Keep leases, finance documents, licences, guarantees and important contracts accessible to the right people. Check whether death, incapacity or a change of control triggers notification, consent or termination provisions. A personal guarantee should not be assumed to disappear on death.
A will operates on death. An enduring power of attorney can address personal financial decisions during incapacity, within its scope, but does not itself make the attorney a company director. Company authority requires separate planning. Include substitute executors and appropriate backup arrangements for management, and have successors understand their responsibilities before they need to act.
The Australian Government’s succession-planning guide recommends choosing a willing, capable successor, valuing the business and documenting processes. Training and a clear handover record can preserve knowledge that would otherwise remain with the founder.
5. Include websites and other digital business assets
Business value may sit in a website, domain name, online store, software, digital content, customer database or revenue-producing account. Some businesses also hold cryptocurrency or online investment accounts. Identify the legal owner and account holder for each asset. A company-owned crypto holding belongs to the company; it does not become a personal estate asset simply because the founder controlled the wallet.
Check who holds the domain licence, who owns the website content and software, and whether a developer’s contract assigns the relevant intellectual property. Licences and platform accounts may restrict transfer. Control of a login is not proof of ownership, and a will cannot override provider terms or privacy obligations.
auDA warns that acquiring a business does not automatically transfer its domain name licence. Where a transfer is needed, arrange it through the registrar and check eligibility. If the company remains the registrant after a shareholder’s death, the immediate task may instead be updating authorised contacts and ensuring renewals continue.
Keep a secure register of providers, account identifiers, renewal dates, authorised administrators and recovery arrangements. Use appropriate access controls, multi-factor authentication and tested backups. Plan for the loss of the owner’s phone or personal email access. Keep passwords and cryptocurrency recovery phrases out of the will; arrange secure, lawful access separately. Australian cyber-security guidance explains website access and backup measures.
For the broader estate-planning issues, read our article on securing digital assets in your will. Business succession adds another question: how will those assets remain usable while ownership and management change?
6. Test the plan against a practical example
Illustration only: a founder leaves her company shares equally to two children. One manages customer orders; the other has no business involvement. The founder is the only director and controls the domain account, online banking approvals and store administrator account. The will identifies the beneficiaries, but the business still needs an authorised director and workable access arrangements.
An effective plan would address the director appointment, immediate trading responsibilities, account recovery, governance between the children and whether the business should eventually continue or be sold. This example is hypothetical. It shows why naming beneficiaries alone cannot settle every operational issue.
7. Review funding and implement the plan
Assess working capital, debts, guarantees, insurance and the estate’s ability to meet obligations without a rushed sale. Get accounting advice before restructuring or transferring interests. Business capital gains tax concessions have eligibility conditions; a family transfer or succession arrangement should not be assumed to be tax-free.
Bring your will, structure chart, company and trust records, agreements, financial statements and digital-asset register to a coordinated review. Revisit the plan when owners, family circumstances, borrowing or business systems change. Keep operational records current even when the will itself does not need amendment.
CM Lawyers can assist with wills and estate planning and the commercial documents that support business succession. Contact our Marrickville team to discuss ownership, management and the handover your business needs.
This article provides general information. Business succession requires advice tailored to the structure, documents and circumstances.
Key resources
