For business owners, estate planning is rarely just about who inherits assets. It is about control, continuity and liquidity at a moment when the business is most vulnerable. A well-intentioned but poorly structured plan can stall decision-making, trigger disputes, or force the sale of an otherwise healthy enterprise.
This article looks at estate planning through the lens of business ownership. It focuses on what happens at death, where plans commonly break down, and how experienced advisers structure arrangements so businesses can continue to operate while family interests are managed sensibly.
Why business owners face different risks
A business is not a passive asset. It requires decisions, signatures, and cash flow. When an owner dies, those needs do not pause. Staff still need to be paid, contracts honoured, and regulatory obligations met.
The risks that arise for business owners tend to fall into three categories:
Control risk – who can make decisions immediately after death?
Continuity risk – can the business keep operating without disruption?
Value risk – is the business forced into a sale at the wrong time?
Traditional estate planning often focuses on distribution. For business owners, the first question should usually be control.
Ownership versus control
One of the most common misunderstandings is assuming that ownership and control are the same thing. They are not.
A person may own shares in a company, but control often sits with:
the board of directors,
the trustee of a trust,
or whoever holds key decision-making powers under governing documents.
On death, shares may pass under a Will, but control may not. If the structure is not aligned, beneficiaries can inherit value without inheriting authority, or vice versa. Either scenario can create conflict.
Effective estate planning for business owners starts by mapping where control actually sits, not where people assume it sits.
Companies and shares
Where a business is operated through a company, the owner’s shares will usually form part of their estate. That does not automatically resolve who controls the company day to day.
Key issues include:
who appoints or removes directors,
whether there are multiple shareholders with different interests,
whether shareholders’ agreements restrict transfers on death, and
whether the executor has the power to step into the deceased’s shoes temporarily.
Executors often discover that, while they hold shares, they have limited practical ability to influence the company without cooperation from others.
Trust structures and control
Many businesses operate through discretionary trusts. In these structures, legal ownership and beneficial enjoyment are separated.
Control usually sits with:
the trustee, and
the appointor (or similar role).
From an estate planning perspective, the appointor role is often more important than the trust assets themselves. Whoever controls the appointor role can ultimately control the trust.
Failing to deal with succession of the appointor on death is one of the most common and serious planning oversights for business owners.
What happens immediately after death
The period immediately after death is often overlooked in planning, yet it is when the greatest risk arises.
Questions that often surface include:
Who can sign contracts or cheques today?
Can bank facilities continue?
Can the business enter or exit transactions?
What happens if a co-owner refuses to cooperate?
A Will that works perfectly on paper may offer no practical solution in the first weeks or months after death. Good planning anticipates this gap and addresses interim control.
Buy–sell arrangements
Buy–sell agreements are a common tool in multi-owner businesses. In theory, they provide a clean exit: the deceased’s interest is sold, and their estate receives value.
In practice, buy–sell arrangements often fail because:
they are not properly funded,
valuations are outdated or unclear,
they conflict with Wills or trust deeds, or
they rely on insurance that no longer exists or is inadequate.
When buy–sell arrangements are used, they must be integrated with the estate plan, not bolted on separately.
Liquidity on death
Even where control issues are addressed, liquidity remains a major challenge. Businesses are often asset-rich but cash-poor.
Common liquidity pressures include:
paying estate debts or tax,
funding family provision claims,
equalising distributions between business and non-business beneficiaries, and
avoiding forced asset sales.
Life insurance, retained earnings, or staged buy-outs can all play a role, but only if planned deliberately. Without liquidity planning, executors may have little choice but to sell assets under pressure.
Testamentary trusts and business interests
Testamentary discretionary trusts are frequently used by business owners, particularly where:
children are involved in the business to different degrees,
asset protection is a concern, or
control is intended to be exercised over time.
However, placing business interests into testamentary trusts raises additional questions:
Who will act as trustee?
Do they have the skills to manage or oversee the business?
How will conflicts between business and non-business beneficiaries be managed?
In many cases, separating control from benefit is sensible. In others, it simply shifts conflict into a different forum. There is no single correct answer, but the question must be addressed consciously.
Family dynamics and expectations
Business estates often sit at the centre of family tension. Common scenarios include:
one child working in the business while others do not,
assumptions that “the business child” should receive everything,
expectations of equal treatment despite unequal involvement, and
informal promises made over many years.
Courts do not enforce family understandings unless they are reflected in formal arrangements. Where expectations and documents diverge, disputes are likely.
Clear planning, and sometimes difficult conversations during life, reduce the scope for misunderstanding later.
Superannuation and business succession
Superannuation is often treated separately from business planning, but for many owners it represents a significant pool of value. This can particularly be the case if a self-managed superannuation fund owns business assets, such as the premises from which the business operates.
In addition, decisions about whether superannuation is paid:
directly to beneficiaries, or
into the estate,
can materially affect the balance between business and non-business beneficiaries. In some cases, superannuation provides the liquidity needed to allow business interests to remain intact.
As with other aspects of planning, alignment matters more than the specific choice.
What executors struggle with most
From a practitioner’s perspective, executors administering business estates commonly struggle with:
lack of information about the business structure,
resistance from surviving business partners,
unclear or conflicting documents, and
pressure from beneficiaries with competing interests.
Executors are often expected to “just sort it out”, despite having limited authority or experience in running a business. Planning that assumes an executor will simply step in and manage a business is rarely realistic.
When plans unravel
Even careful plans can unravel if they are not reviewed. Common triggers include:
changes in business structure,
new shareholders or partners,
growth in business value,
relationship breakdowns, and
changes in health or capacity.
An estate plan that worked when the business was small may be inappropriate once it becomes the primary family asset.
Regular review is not a luxury for business owners; it is a necessity.
Planning with disputes in mind
Experienced advisers plan with disputes in mind, not because conflict is inevitable, but because it is common.
This means:
identifying likely points of friction,
structuring control deliberately,
ensuring documents are consistent across entities, and
providing executors with clear authority.
A plan that assumes cooperation is fragile. A plan that anticipates disagreement is usually more robust.
Key takeaway
For business owners, estate planning is as much about governance and continuity as it is about inheritance. Wills, trusts, shareholder agreements and superannuation arrangements must work together if the business is to survive the owner’s death without unnecessary disruption.
The most effective plans are those that recognise the realities of business, family dynamics and human behaviour, and address them head-on rather than hoping for the best.
Related Guides — Wills & Estates Law in NSW
Estate planning for business owners involves protecting your business interests while also planning for your personal and family’s future. The following guides cover other key aspects of wills, estate administration, and inheritance law in New South Wales to help you build a comprehensive estate plan.
Wills and Estates Lawyers in Sydney
An overview of wills, estate administration, and how specialist lawyers can help in NSW.Executor Duties in NSW: What Happens After Someone Dies
A practical guide to the legal responsibilities of executors, including managing assets, paying debts, and distributing the estate.Applying for Probate in NSW
A step‑by‑step look at when probate is required, how to apply, and what executors must prepare.Letters of Administration in NSW: What Happens When There Is No Will
Explains how an estate is administered when a person dies without leaving a valid will.Family Provision Claims in NSW: How a Will Can Be Challenged
Outlines who can challenge a will and how courts assess family provision applications.Superannuation and Death Benefits
An explanation of how superannuation death benefits are paid and why they may not form part of the estate.Testamentary Discretionary Trusts
An overview of how testamentary discretionary trusts work and why they can be a powerful tool in estate planning.Powers of Attorney, Enduring Guardianship and Advance Care Planning in NSW
A guide to planning for decision‑making if you lose capacity, and how powers of attorney and enduring guardianship operate.Estate Planning for Blended Families and Complex Relationships
A guide to estate planning considerations for blended families and non‑traditional relationships.Digital Assets and Cryptocurrency in Estate Planning
How digital assets and crypto should be considered in estate plans.Costs of Probate and Estate Administration in NSW
A breakdown of typical fees and costs involved in administering an estate and obtaining probate.Dying Without a Will in NSW
An explanation of what happens under NSW intestacy laws when someone dies without leaving a valid will.
Speak to a specialist estate planning lawyer
Our Sydney lawyers have decades of experience dealing with business transactions and business succession planning. To speak with one of our estate planning experts about your business structures and business succession plan, give us a call or submit an enquiry now.
