Shareholder agreements and the wills that must match them

Reviewing how a company is owned means reading the shareholders' agreement: who can buy shares, what happens on death or exit, whether there are pre-emption rights or cross-option arrangements. Somewhere alongside it sit the owners' personal wills, which decide who inherits their shares if they die. These two documents are meant to be consistent. Very often they are not.

A shareholders' agreement might say surviving shareholders have the option to buy a deceased owner's shares, while the deceased's will leaves those shares outright to a spouse who has no interest in selling. Or the will is silent, or decades out of date, or drafted before the person ever owned the business. You will spot the mismatch during your review; resolving it is not your job.

The consequences of contradictory documents surface at the worst possible moment, on the death of an owner. The surviving shareholders think they have a right to buy; the family think they have inherited; the agreement and the will point in opposite directions. The result is often dispute, delay, and sometimes the effective paralysis of the company while the conflict is resolved.

There are further traps that only a specialist should assess, such as whether the shares qualify for available inheritance tax reliefs, and whether the way the agreement is drafted inadvertently jeopardises those reliefs. These are legal and tax questions. You can flag that the documents disagree; you must not opine on how to reconcile them or on the tax treatment.

• A will that contradicts the agreement's buyout provisions
• An out-of-date or silent will predating share ownership
• Agreement drafting that risks inheritance tax reliefs
• No cross-option or funded route to complete a buyout

The mismatch itself gives you a precise, defensible reason to refer. You are not raising wills out of nowhere; you found a specific contradiction in the client's own documents. "Your shareholders' agreement and your will do not match, and on a death that would cause real problems. Reconciling them, and the tax side, is specialist legal work, so I will introduce you to a vetted estate specialist, and to a vetted, regulated advice firm for any protection needed to fund a buyout."

That framing keeps you as the consultant who read the documents and the introducer who routed the fix. You never draft, never advise on the tax, and never propose the wording.

Owners find it hard to dismiss a concrete contradiction in their own paperwork. Abstract warnings about wills are easy to postpone; a specific clash between their agreement and their will, pointed out by the consultant who read both, is not. The evidence is in front of them.

The reconciliation almost always has two halves, which is why two specialists are usually involved. The legal documents need aligning, which is estate work, and any buyout often needs funding through protection, which is regulated advice. A vetted estate specialist and a vetted, regulated advice firm handle those respectively. Your job is to see that they must match, and to introduce the people who can make them match.

SmartPeer is commission-only, and you act purely as a referrer. You introduce the legal reconciliation to a vetted estate specialist and any funding question to a vetted, regulated advice firm, with each introduction tracked from the start. Where an introduction leads to business, you receive a member share of the resulting fee, typically in the range of 60 to 70 per cent for members.

The discipline is the same throughout. Keep reviewing ownership documents as you always do. When the agreement and the will contradict each other, resist any urge to suggest the fix yourself. Make the introductions, let them be logged, and let the specialists reconcile the documents. The owners avoid a crisis on death, and your document review ends in tracked, rewarded referrals rather than a warning nobody acts on.