Wills for Business Owners

A will written for someone who owns a business has to do more than divide up property. It has to keep a company running through the worst week your family will ever have. Shares need an owner, decisions need an authority, and a tax bill arrives whether or not anyone is ready for it. Parr Business Law builds estate plans for incorporated owners and their families across British Columbia, covering the will, the corporate structure, and the succession plan as one piece of work.

Estate Planning for Business Owners in BC: What You Need to Know

Most estate plans assume the assets sit still. A house does not need a decision made about it on Tuesday morning. A business does.

That is the difference that drives everything on this page. Your shares carry value, but they also carry control, and the two do not always want to go to the same person. Your spouse may inherit the company without any interest in running it. Your business partner may be ready to run it without any right to own it.

Good planning sorts that out in advance. It matches the will to the shareholders' agreement, funds the tax bill so nobody has to sell in a hurry, and names people who can act on day one rather than after a court grant arrives months later.

Why a Business Owner's Will Is Different

Your personal assets and your corporate assets follow different rules, involve different people, and create different problems when you are gone.

What Happens If You Die Without a Will

Without a will, BC's Wills, Estates and Succession Act decides who inherits your shares. The statute divides your estate among your spouse and children according to a fixed formula that takes no account of who works in the business, who your partners are, or what you would have wanted. 

The result is often shares split among several people, none of whom has clear control. The court also has to appoint an administrator before anyone can act, which leaves the company without authority in the meantime.

The Risk of a Forced Sale

An estate that owes tax it cannot pay has one obvious asset to sell, and it is usually the business. Sales made under time pressure fetch less than sales made on your terms.

The same pressure applies when several beneficiaries inherit shares, and only one of them wants to keep the company. Buying out the others takes cash the estate may not have. Planning is what keeps that decision from being made for you.

How Your Shareholders' Agreement Affects Your Will

If you have co-owners, your shareholders' agreement almost certainly says something about what happens to your shares when you die. Whatever it says, it governs.

Buy-Sell Clauses and Funding a Buyout With Life Insurance

A buy-sell clause obliges your estate to sell your shares and your surviving partners to buy them, usually at a price set by a formula in the agreement. It is a clean answer to a messy problem, but only if the money is there.

Most agreements are funded with life insurance. Each shareholder is insured, and the proceeds pay the estate for the shares. Without that funding, your partners are left owing your family money they may have to borrow, and the obligation becomes a burden rather than a solution.

Key Person Insurance and Business Continuity

Key person insurance covers something different. It pays the company, not the estate, and it exists to absorb the hit the business takes when the person who held the client relationships or the technical knowledge is suddenly gone.

The two policies solve separate problems, and both are worth having. One buys your shares. The other buys the company time to replace what it lost.

Making Your Will and Your Agreement Agree

We regularly see wills that leave shares to a spouse and shareholders' agreements that require those same shares to be sold to a partner. The agreement wins, and the will creates a false expectation that ends in a family argument.

Review both documents together every time either one changes. Alignment is not a one-off task.

Tax Consequences When a Business Owner Dies

Probate fees get the attention. Income tax is the larger number.

Deemed Disposition of Your Shares

Canadian tax law treats you as having sold your shares at fair market value immediately before death, even though no sale took place. Your final return reports the resulting capital gain, and your estate owes the tax.

For an owner whose company has grown substantially since incorporation, that gain can be large, and the cash to cover it does not exist anywhere obvious. Deferring the tax by rolling shares to a spouse is possible in many cases, but it postpones the bill rather than removing it.

The Lifetime Capital Gains Exemption

Shares that qualify as small business corporation shares may be eligible for the lifetime capital gains exemption. For 2026, it shelters up to $1,275,000 of capital gain per person, which translates to a maximum deduction of $637,500 against your taxable gain. 

The exemption is cumulative, and it belongs to the individual, not the company. If you used part of it on an earlier sale, only the remainder is left. It also indexes each year, so the figure your accountant quoted three years ago is no longer the figure.

Qualifying is not automatic. Your shares have to pass three tests. At the time of sale, the company must be a small business corporation, meaning all or substantially all of its assets are used in an active business carried on mainly in Canada. For the 24 months before the sale, it must have been a Canadian-controlled private corporation with more than half its assets by value used in that active business. And throughout those same 24 months, nobody other than you, a partnership you belong to, or a person related to you can have owned the shares. 

Companies that accumulate cash, investments, or surplus real estate quietly fail those tests. Cleaning that up takes time, which is why the exemption is something to plan for years ahead of a sale rather than in the month you decide to sell.

Because the exemption is per person, a family trust holding shares can let several family members each claim their own. That multiplication is one of the main reasons owners set trusts up in the first place.

Structures That Reduce Tax and Simplify Succession

The will is one document in a larger structure. These are the tools that do the heavy lifting around it.

Estate Freezes

An estate freeze caps the value of your shares at today's number and directs all future growth to your children or a trust. You exchange your growth shares for fixed-value preferred shares, and the tax on everything the company earns from that point forward becomes the next generation's problem rather than your estate's.

It is the most effective tool available for an owner whose company is still growing. Our guide to estate freezes covers the mechanics in detail.

Family Trusts and Holding Companies

A family trust holds shares for your children without making them shareholders directly, which keeps control with the trustees while the benefit flows to the family. It also creates flexibility about who receives what and when, rather than locking in decisions today.

A holding company sits above the operating company and gives you somewhere to move surplus cash, which protects it from operating risk and can help preserve your capital gains exemption. Our article on family trusts explains how the two are commonly used together.

Corporate Wills and Probate Fees

A Corporate Will governs your company shares separately from your personal will, keeping their value out of the probate calculation. BC probate runs roughly 1.4 percent above $50,000, so on a company of any real size, the savings are significant. 

It also keeps your ownership structure off the public record. Our Corporate Wills page covers how dual wills work and where they go wrong.

Choosing an Executor Who Can Run a Business

Executors of a business owner's estate need commercial judgment, not just diligence. The role involves running or selling a company, not filing paperwork.

The Carry-On-Business Clause

Without express authority, an executor may be reluctant to keep operating your business, and hesitation costs money. A carry-on-business clause gives them clear permission to continue the company, hire and fire, sign contracts, and make the decisions the business needs while the estate is administered.

It should also protect them personally for decisions made in good faith. Executors who fear liability tend to do nothing, which is usually the worst available option.

Powers of Attorney and Representation Agreements

Death is not the only risk. An owner who becomes incapable of managing their affairs leaves the same authority gap, and a will does nothing until you die.

An enduring power of attorney lets someone you choose handle your corporate and financial affairs while you are alive but unable to act. A representation agreement covers health and personal care decisions. Every incorporated owner should have both alongside their will.

Business Succession Planning: Deciding Who Takes Over

Succession is a decision about people. The legal documents follow it. They do not make it for you.

Passing the Business to Family

Transferring a company to the next generation works when the successor wants it and is ready for it. Both conditions matter, and neither is safe to assume.

The plan usually combines an estate freeze, a family trust, and a training period long enough for the successor to earn the confidence of staff and customers. Our guide to transferring your business to the next generation walks through the sequence.

Selling to a Partner, Employee or Third Party

Where no family successor exists, the buyer is usually a co-owner, a management team, or an outside purchaser. Each route changes what your will needs to say and how your shares should be structured before the sale.

Sales to partners are typically handled through the shareholders' agreement. Sales to employees or third parties need lead time, clean records, and a corporate structure that will survive a buyer's due diligence.

Parr Business Law: Trusted Counsel for Business Owners

An estate plan for an incorporated owner touches corporate law, tax, and family circumstances at the same time. Handled by separate advisors who never speak to one another, the pieces rarely fit.

Parr Business Law does this work as one file. Our lawyers review your corporate structure, your shareholders' agreement, and your family situation together, then build a plan where the will, the company documents, and the succession strategy all say the same thing.

Book a consult to review your current plan and find the gaps before they become your family's problem.

Why Choose Parr Business Law?

Business Law and Estate Planning Under One Roof

We incorporate companies, draft shareholders' agreements, and write wills. When your corporate and personal plans have to agree with each other, keeping both practices in one firm removes a great deal of back and forth.

Clear, Practical Plans Your Family Can Actually Use

A plan nobody understands is a plan that fails at the worst possible moment. We explain the structure in plain language and leave you with documents your executor and your family can follow without a lawyer standing over them.

Direct Access to Senior Lawyers

You work with the lawyer handling your file. Our team is deliberately small, which means the person who understands your company is the person who answers when you call.