Two Wills, One Small Company, and a Shareholder Dispute

The situation

Bilal spent most of his working life as a retail worker, and in his forties he and a friend, Craig, pooled their savings to buy a small incorporated retail shop together. Bilal never ran the day-to-day operations after the first few years — Craig did — but Bilal kept a minority block of shares, about thirty percent, and the two men stayed on reasonably good terms for over twenty years. When Bilal and his wife Zainab retired, their own finances were modest: a rented apartment, some savings, a small pension, and that block of shares sitting quietly in the background.

Years before he died, on the advice of a lawyer at the time, Bilal signed two wills instead of one. A primary will covered the assets that would need to go through probate — the court process that validates a will and lets an executor deal with banks, land registries and other institutions. A secondary will covered assets that do not legally require probate to be transferred, including his shares in the private company. The idea, common for anyone who holds shares in a private corporation, is that probate is charged as a percentage of the value of the assets passing through it, so keeping the shares out of that process avoids paying that cost on their value entirely. When Bilal died, Zainab came to Treadstone Law as his executor to have the primary will probated and the estate settled.

What the estate review found

The primary will was straightforward. It listed a bank account, a modest investment account and Bilal's personal belongings, adding up to roughly $130,000, and probate on that portion proceeded without complication. The secondary will was where things became complicated — not because the will itself had a flaw, but because the company's own governing paperwork did.

When our team reviewed the shareholders' agreement Bilal had signed decades earlier alongside Craig, it contained a transfer restriction that is common in small private companies but easy to forget about once it is signed: if a shareholder dies, the surviving shareholders have the right of first refusal to buy the deceased's shares before they can pass to anyone else, including a spouse under a will. The agreement also fixed how that buyout price would be calculated — a formula tied largely to the company's book value, meaning the value carried on its accounting records, rather than what the shares might actually be worth if sold on the open market.

An independent valuation our team arranged put the fair market value of Bilal's thirty percent stake at roughly $80,000, largely because the shop's inventory and a long-standing lease had real value the book figure did not capture. The shareholders' agreement formula, applied strictly, produced a buyout price of about $40,000. Craig, through his own lawyer, invoked the agreement and offered exactly that. Zainab, understandably, did not want to accept half of what the shares appeared to be worth simply because of a formula her late husband had agreed to when the company was worth very little.

What made the situation harder to sit with was that Zainab, as a bookkeeper by trade, could read the company's financial statements well enough to see the gap for herself. She could see the inventory sitting on the shelves, she knew what similar retail leases in the area were worth, and she knew the book-value formula had been written at a point when the shop was barely breaking even. Understanding the numbers did not give her any legal leverage on its own, though — a shareholders' agreement does not bend because one side can prove the formula is outdated. It only bends if the other side agrees to renegotiate, or a court is persuaded to intervene.

What we did

1. Confirmed the multiple wills strategy had worked as intended. The shares never needed to be listed in the probate application, and no probate fee was ever assessed on their value. That part of Bilal's planning did exactly what it was meant to do — it simply did not, and was never meant to, override a separate contract governing the company itself.
2. Read the shareholders' agreement against the will, not instead of it. A will controls who inherits an asset. It cannot rewrite the terms a shareholder previously agreed to about how that asset can be transferred. Zainab's executorship gave her the legal right to deal with the shares, but the right of first refusal clause still bound whoever held them, her included.
3. Tested the valuation formula rather than accepting it at face value. Many older shareholders' agreements fix a pricing method once, at signing, and are never revisited as the business changes. We compared the book-value formula against the independent valuation and set out, in plain terms, why the gap existed — largely unrecorded inventory value and a lease Craig himself had since renewed on favourable terms.
4. Opened a negotiation instead of a court application. Zainab could have applied to the Superior Court to challenge the formula as unconscionable or sought a different remedy, but that route would likely have taken well over a year and cost more, in legal fees and stress, than the gap between the two valuations. We proposed a middle figure to Craig's lawyer and explained the reasoning behind it plainly, including what a court fight would cost both sides regardless of outcome.
5. Documented the settlement properly. Once a number was agreed, we made sure the share transfer, the release of any further claims between the estate and the company, and the payment terms were all captured in writing, so neither side could revisit the deal later.

The outcome

Craig agreed to pay roughly $62,000 for the shares — well above the $40,000 formula price, though still below the $80,000 independent valuation. It was a genuine compromise: Zainab gave up a portion of what an outside buyer might theoretically have paid, and Craig paid more than the agreement technically required him to. Combined with the roughly $130,000 passing through the primary will, the estate settled at a total value of about $192,000, squarely within what Bilal and Zainab had spent their working lives building.

The probate savings from the multiple wills structure held throughout — the shares were never subject to probate, and the tax on that portion of the estate was never paid, which on a $192,000 estate is a meaningful amount of money to a retired household. The whole process, from Zainab's first meeting with our team to the signed share transfer, took a little over four months, most of which was the back-and-forth of negotiation rather than any court timeline — a genuine advantage over the year or more a formal challenge to the shareholders' agreement would likely have taken.

But the case is a reminder that a well-built will only controls what a will has authority over. A shareholders' agreement is a separate contract, and it survives the death of the person who signed it exactly as written until someone renegotiates it, in life or in death. Bilal's planning got the probate-saving structure right; what neither he nor Craig ever revisited was the pricing formula sitting quietly inside a decades-old agreement, waiting for the day it would actually matter.

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