You can have a Shareholder (or Buy-Sell) Agreement prepared that will address what happens to your shares in the company if you die unexpectedly. Generally, these Agreements will provide for the deceased shareholder’s shares to be redeemed by the company or purchased by the other surviving shareholders, thus keeping the shares within the company or among its surviving shareholders and out of the hands of those who may have no involvement or interest in the company. Absent such an agreement, upon your death your shares would become an asset of your estate and would be distributed in accordance with the provisions of your will, or if you do not have a will, in accordance with the provisions of North Carolina’s intestacy statute. A Shareholder’s Agreement can also address other situations that may arise among the shareholders, such as divorce, disability and one shareholder wanting to sell his/her shares.
Jeff Workman of our firm can assist you with the preparation of these Agreements.