First Wills for a Kitchener Founder and Her Shareholders

The situation

Kavya and Rohan came to our firm a few months after their daughter Zofia was born, wanting what a lot of new parents want: a first will. Kavya worked as a software developer and, five years earlier, had co-founded a small technology company with a business partner, holding a significant minority stake. Rohan worked as a professional engineer with a steady salary. Together, with the value of Kavya's shares, their home equity, and their savings, their combined estate sat somewhere between roughly $1.2 million and $2.5 million depending on how the company was valued in a given year.

Their instructions were simple on the surface. Each wanted to leave everything to the surviving spouse, and if they died together, everything to their daughter in trust until she was old enough to manage it herself. Kavya mentioned, almost in passing, that her company shares would obviously just pass to Rohan if something happened to her. That single assumption turned out to be the most important sentence in the meeting.

Where the will and the shareholder agreement collided

Before finalizing any will that disposes of shares in a private company, our team asks to see the shareholder agreement — the contract between a company's owners that governs what happens to shares when an owner dies, becomes disabled, or wants to sell. Most founders sign these agreements early, focused on the business terms, and rarely reread them once the company is running. Kavya had not looked at hers in three years.

When we reviewed it, the conflict was immediate. The agreement contained a mandatory buy-sell clause: on the death of a shareholder, that shareholder's estate was required to sell the shares back to the company or to the surviving shareholder, at a valuation formula set out in the agreement, within a fixed window after death. Kavya's will, as she described it, assumed her shares would simply transfer to Rohan and stay in the family. Under the shareholder agreement she had already signed, that was not an option. Her estate would be forced to sell, whether or not Rohan wanted to keep the shares or thought the price was fair.

The valuation formula made the problem worse. It was based on a multiple of the company's book value from its most recent year-end financial statements, a method that undervalued the company relative to what a buyer would likely pay for it as a going concern. Based on the company's recent financials, we estimated the formula would put Kavya's stake at roughly $150,000 to $200,000 below what an arm's-length sale might realistically achieve. There was also no funding mechanism named in the agreement — no life insurance policy or payment schedule — so if Kavya died, the company or her business partner would need to find that cash on short notice, or negotiate delayed payments with a grieving family. Neither side had thought through how that would actually play out.

This is a common gap for business owners writing their first will. A will describes what a person wants to happen to what they own. But shares in a private company are not fully theirs to dispose of freely if a shareholder agreement already dictates their fate. The will has to work within whatever the corporate documents allow, not around them.

What we did

1. Mapped the conflict in plain terms for both spouses. We walked Kavya and Rohan through exactly what the shareholder agreement required, what it meant for the estate if Kavya died first, and why her will alone could not override a contract she had already signed with her business partner.
2. Drafted the will around the reality on the ground. Rather than write a will that promised something the shareholder agreement would not deliver, we drafted Kavya's will to direct that any proceeds from a forced sale of her shares — under whatever formula applied at the time — would flow into the family trust for Rohan and their daughter, alongside a written acknowledgment that the shares themselves could not be guaranteed to pass intact.
3. Opened a conversation with Kavya's business partner. With Kavya's agreement, we raised the valuation and funding gaps directly, framing it as a mutual problem: her business partner faced the identical risk in reverse, with no better protection for their own family if something happened to them.
4. Negotiated amendments to the shareholder agreement. Over several weeks, we worked with the other shareholder's own advisor to update the valuation formula to reference a fair market value approach tied to an independent appraisal or an agreed earnings-based method, rather than book value alone, and to extend the payment window so an estate would not be forced into a fire-sale timeline.
5. Recommended life insurance to fund the buyout. We suggested each shareholder carry a life insurance policy, payable to the company or to each other, sized to cover the expected buyout price. This meant a surviving family would receive cash promptly instead of waiting on the company to scrape together funds, and the company would not be destabilized by a sudden capital demand.
6. Finalized both spouses' wills together. Once the shareholder agreement amendments were signed, we updated Kavya's will to reflect the new, more predictable valuation and timeline, and completed Rohan's will and both of their powers of attorney for property and personal care at the same time, naming guardians for their daughter.

The outcome

The result was a compromise, not a full win for either shareholder. Kavya's business partner did not want to give up the book-value formula entirely, since it also protected them from being forced to overpay if Kavya ever left the company voluntarily. After negotiation, the parties agreed on a blended approach: the appraisal-based valuation would apply on death or disability, while the original book-value formula would remain for a voluntary departure. The payment window was extended from the original short period to a longer, staged schedule, and both shareholders agreed to carry life insurance sized to the new expected buyout figure, split roughly evenly in additional annual premium cost between them.

Kavya gave up the idea that Rohan could simply inherit and keep her shares outright — that was never realistic once the buy-sell clause existed, no matter what her will said. What she gained was a valuation formula that would likely put roughly $120,000 to $150,000 more into her estate than the original book-value method, and a funded, orderly buyout instead of a scramble. Her business partner accepted a modestly higher and slower-vesting insurance cost in exchange for keeping control of the company without a forced negotiation with a grieving spouse under time pressure. Both sides left with a document that actually matched what would happen in practice, rather than one that looked tidy on paper and would have broken down the moment it was tested.

Kavya and Rohan's wills were finalized within a few weeks of the shareholder agreement amendments closing. Their daughter Zofia is named as the ultimate beneficiary of the family trust, with Rohan and a trusted family member named as co-trustees until she reaches adulthood.

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