LAW
Keeping probate out of court
In recent years , Tilly , Bailey and Irvine has seen a substantial increase in contentious probate work – disputes regarding wills and estates . They can have a major impact on businesses . But Alison Leith – partner and head of commercial dispute resolution , based at the firm ’ s Wynyard office – says planning can ensure 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 .
“ 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 , while 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 .” But what should businesses do ? “ Draw up a shareholders ’ agreement , setting out what should happen to the
Prevention – Alison Leith says probate dispute prevention is better than cure .
shareholding on death ,” explains Alison . “ For example , it could provide for other shareholder ( s ) to have first option to buy it .
“ 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 the business can continue to run without unnecessary issues .”
Just doing those basics , says Alison , can head off damaging disputes . But what if the feared dispute becomes reality ?
“ 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 , time-consuming and stressful at any time , but especially following the death of a close colleague or family member .”
And in summary ? “ 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 .”
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58 | Tees Business