Business Owners Must Have a Will

Posted on : 13 June 2025 Article by : Krystal Potrzeba

Krystal Potrzeba is a Senior Associate at O’Shea Dyer Solicitors Townsville. She practices exclusively in estate planning and succession Law. She prepares standard and complex wills, advises on trusts, and works with executors and family members to administer estates when a loved one passes. She also advises regarding contesting and defending a will.

Business Owners must have a Will

We recommend business owners obtain estate planning advice, which specifically provides for how their business will be dealt with on their death.

A customised Will can ensure there is a smooth transition for their business.

You need a Will and Enduring Power of Attorney to dictate who controls the business upon your death if you wish the business to continue.

Without a Will, your estate may be subject to intestacy laws, meaning the government decides how your assets are distributed.

If your Business is Owned by a Company

If a business is operated by a company and the sole director dies, this will usually leave the company without a person properly authorised to immediately manage the company. This will halt operations, which results in losing business and income.

If your company owns your business, your Will can’t provide who will receive assets owned by the company. You can only gift shares in the company to beneficiaries. The company continues to own assets.

Assets including a business owned by a trust cannot be distributed as per your Will. In this situation, assets will be distributed as set out by the terms of the Trust Deed.

You need to make sure you have a Will that sets out who controls your Trust when you die. A lawyer also needs to make sure the Trust Deed allows for this.

Upon the death of a partner, the partnership will need to be wound up. This situation is similar to your company owning a business.

A Company and a Trust are ‘legal entities’. So, a business operated by a Company and/or a Trust can continue when you die as long as someone else can be appointed by the executor of your Will, to take over and be able to sign off on behalf of the company/trust.

If your business is operating as a sole trader (and not a company or trust) any bank accounts in your sole personal name will be frozen upon your death until certain processes and checks are complete. This will halt operations of the business.

If you are a Sole Trader, be aware that on your death:

Bank accounts:

Upon your death, your bank accounts will be frozen, including your business bank accounts.

If you want your beneficiaries to continue running the business, you will need to add specific clauses to your Will to allow your estate to pay for costs associated with running your business. Otherwise, costs will be the personal responsibility of the executors or beneficiaries, up until the estate is finalised. This could mean the business will need to cease or go into debt if contractual obligations aren't paid on time.

Employee Contracts

Upon your death, regardless of what your Will says, all employment contracts cease. Your legal personal representative (the Executor of your Will) will be required to renegotiate contracts with your staff.

If their employment is not renewed, employees may be entitled to redundancy claims which could be significant and will need to be paid from your estate. You should include in your Will a special ‘power to run the business clause’ to allow the Executor to run the business and to employ staff.

Rented Business Premises and Stock

Upon your death, your rental agreements and trade contracts may cease. This will depend on the terms in the lease.

Any assets owned by your business such as stock and equipment, will form part of your Estate.

This means any stock you have on hand is no longer available to be sold unless a specific clause is included in your Will to allow the Executor to continue to run the business and to use the stock.

Any items you lease or rent may be no longer available to your Executor/personal representative unless they renegotiate those contracts.

Bottom Line

If you have a business run as a:

Sole trader
Company
Trust, or
Partnership

You should obtain specific legal advice from an experienced estate planning (Wills) lawyer. You need to have specific provisions in your Will, so you don’t leave a large ‘mess’ for loved ones.

We always recommend having a customised Will and Estate plan in place.

See our website for details about fees for Wills. They are not as expensive as you may think.

Wills and Probate Lawyers - Townsville

Our Wills and Probate lawyers practice exclusively in Succession law. They are available to assist with all types of Wills, Estate Planning and Estate Administration matters.

We offer fixed fee prices for Wills and offer first appointments with an experienced Estates Lawyer for $330 to help you plan estate administration when a loved one dies. We also advise on challenging or defending a Will.

Fees and Prices Call Us

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