One potentially tricky situation in the legal world is when two different branches of the law collide. Suppose someone who played a critical role at a company dies. What becomes of their role in the business? Likewise, should the issue be handled by a corporate lawyer or a will and trust attorney? Take a look at these issues and how they're dealt with.
Figuring Out the Right Field of Law
A lot of these issues can be ironed out simply by figuring out which field of law is applicable. For example, dealing with shares in a company is almost always a problem for a will and trust law attorney because the shares are seen as property that can be transferred to heirs or beneficiaries. Conversely, someone's position within the company is a problem to be handled under corporate law, and the board of the business will have to figure out who ought to be the replacement for the deceased.
Unsurprisingly, there are lots of scenarios where it ends up being a little bit of both fields of law. Officers in a company, for example, usually have some shares. Fortunately, those two issues will be severable.
Trusts Involving Businesses
Notably, the previous example largely pertains to shareholding corporations. Not all companies fit that model, and the way successors are appointed in some businesses is strictly dictated by trust laws.
It is possible to configure a partnership so the surviving parties end up getting equal claims to authority and business stakes when another partner dies. This is almost always governed by some type of trust. If there are three partners in the business, for example, the death of the third partner would lead to the division of their stake in the business between the remaining two.
As you might imagine, a purely even split can be problematic, and it's important that this sort of trust be planned out with that in mind to ensure someone ends up in a controlling position. Otherwise, the change from three partners to two can provide either of the remaining two with immense veto power.
Business Wills
Some types of simpler businesses can be transferred to new owners by way of wills. If you're planning this sort of action, it's wise to meet with someone who works as both a will and corporate lawyer. They can help you put together the right documentation to ensure the transfer will hold up to scrutiny.
Share17 June 2020
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