By: Sandra Ufondu and Kelsey Sonntag

For many business owners, succession planning is seen as something to deal with “later.” It is often associated with retirement, a sale of the company, or handing the reins to the next generation decades later. However, succession planning should begin the moment you build something of value. While many business owners associate succession with retirement, death is the most common trigger for a transition. For that reason, planning should begin well before most anticipate. Whether you intend it or not, your business already forms part of your estate. If you pass away without a clear plan, the law, not your intentions, will determine what happens next.

From an estate-planning perspective, this article highlights the importance of treating a business as a core estate asset and planning for its transition upon death. It focuses on the need for early succession planning, the role of business restructuring in facilitating an orderly transfer to beneficiaries, and the importance of aligning corporate structures and documentation with estate planning documents, including wills and shareholder agreements.

What Happens When a Business Owner Dies

When a business owner dies, several things can happen immediately: their shares in the business become part of their estate, control of the business may become uncertain, and family members may suddenly inherit control as co-owners under the Intestate Succession Act, 2019, if the deceased had no Will, or if the Will did not account for the distribution of the business. Executors are responsible for managing the estate, including ensuring that business operations continue, often under significant pressure. Without prior planning, this can result in operational paralysis, family conflict, or even the forced sale of the business.

Your business does not pause when you pass away. If something unexpected happens to you, such as an illness, incapacity, or sudden death, your business does not get a grace period. Decisions still need to be made, contracts still need to be fulfilled, employees still need leadership, and clients still expect continuity and completion of services. Without a clear succession plan, your family may inherit a business they do not know how to run, your partners may be forced into disputes with your estate, your employees may face uncertainty or even job loss, and the value of your business that you worked so hard to build can drop quickly.

This is why it is essential to properly organize and structure your business, including filing all necessary corporate documents and formalizing agreements in writing rather than relying on oral arrangements. In O’Brien v. O’Brien Estate, 1998 CanLII 12397, the Saskatchewan Court of Appeal held that informal agreements relating to business ownership did not bind the estate because they were not properly structured as corporate documents. After the owner’s death, his widow refused to honour the informal arrangements, resulting in lengthy and costly litigation; the very outcome that effective succession planning is meant to prevent.

Saskatchewan’s Legal Framework for Business Succession

In Saskatchewan, business succession at death is governed by a combination of estate statutes, corporate law, and common law principles. In Saskatchewan, the Intestate Succession Act, 2019, dictates how property, including business interests, is distributed if the owner dies without a will, while the Wills Act ensures testamentary intentions are properly executed. On the corporate side, the Business Corporations Act requires accurate corporate documentation, including governance rules and agreements, to clarify ownership, control, and the transfer of business interests. At the same time, the enforceability of business arrangements, particularly informal agreements, relies on common-law contract principles, underscoring the importance of aligning written agreements with corporate and estate documents.

Practical Solutions

Effective business succession planning does not occur at death or retirement; it requires early, deliberate planning. Treating a business as a core estate asset means ensuring that legal, corporate, and estate structures work together seamlessly.

1. Early Planning: Succession planning should begin long before a triggering event occurs. Death or critical illness often happens unexpectedly; without advance planning in place, ownership and control of a business can become uncertain overnight. Early planning allows business owners to clearly define who will own, control, and benefit from the business upon death, reducing the risk of disruption, delay, or dispute among family members. These wishes can then be communicated to the various parties in a less stressful, more collaborative manner.
2. Written Business Arrangements Aligned with Wills: Oral or informal arrangements rarely survive death. Properly documented written business arrangements are essential for clearly establishing ownership, control, transfer of interests, and responsibilities within a business. Informal family agreements, even with close relatives who are not formal shareholders, may not be enforceable after death. As seen in O’Brien v. O’Brien Estate, informal arrangements can lead to disputes and unintended consequences. Aligning written business arrangements with a business owner’s Will and estate planning documentation ensures that testamentary intentions are enforceable and consistent with corporate documentation. This reduces the risk of conflict or operational complications.
3. Share Restructuring Where Appropriate: In some cases, restructuring share classes and shareholder agreements can help separate control from economic benefit, allowing a business owner to retain control during their lifetime while facilitating an orderly transition to family members or business partners upon their death. Share restructuring can also provide clarity around dividend entitlements, future growth, and potential access to tax relief mechanisms, ensuring that succession goals are reflected in the company’s capital structure.
4. Alignment Between Corporate and Estate Documents: Perhaps most importantly, all corporate and estate planning documents must be aligned. Wills, shareholder agreements, and governance documents should tell the same story. When these documents are inconsistent, executors and beneficiaries are left navigating uncertainty, increasing the risk of conflict and unintended consequences and draining the hard-earned value of your company. Alignment ensures that the owner’s succession plan is both legally effective and practically workable.
5. Consideration of Tax Implications: Upon death, certain tax consequences may be triggered, including potential tax arising from the deemed disposition of business interests. Given the potential significance of these implications, advance tax planning is important.

How Procido LLP Can Help

Succession planning for a business requires careful coordination between corporate governance and estate planning.

At Procido LLP, our Wills and Estates Practice Group assists business owners with drafting wills, administering estates, and ensuring that business interests are transferred smoothly to intended beneficiaries. Our Governance Group advises boards and directors on best practices to ensure that corporate structures, shareholder agreements, and decision-making processes align with the owner’s succession goals. While Procido LLP does not provide tax advice, we work closely with accountants and financial advisors to help ensure advance tax planning is appropriately addressed within the estate planning process.

By combining corporate governance guidance with estate planning strategies, Procido LLP helps business owners maintain control, minimize disputes, and achieve an orderly transfer of ownership to family members or other beneficiaries.

It is never too early to start. If your business has value today, then it belongs in your estate plan. Waiting until retirement or a crisis means potentially losing control over the outcome. Contact Procido LLP to learn more about how our integrated expertise in wills, estates, and corporate governance can protect both your business and your personal legacy.

See the published version of this article in SHCA’s Think BIG Q, 2026 magazine (pages 30 to 34).

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice. Contact Procido LLP (www.procido.com) if you require legal advice on the topics discussed in this article.