Lawyers warn small business owners against ignoring complexities in business succession
Estate disputes that trap millions of dollars in private corporations are becoming a drag on the economy, as courts struggle to process files that blend corporate and succession law, says estates lawyer Eleanor Carlson.
At Carbert Waite in Calgary, Carlson sees that overlap reshaping her practice. “Estate litigation and commercial litigation increasingly overlap,” she says, noting that many of the firm’s largest matters now require both estate and commercial litigators because the main assets are operating companies, shareholder loans and layered corporate structures rather than simple bank accounts.
In Alberta, the problem is magnified by a dense concentration of closely held businesses in energy services, farming, construction and real estate, many of them, as Carlson puts it, “asset rich and cash poor.” When a founder dies, shares in these companies flow into the estate while the family scrambles to keep the business alive, service debt and pay tax. Promises made over kitchen tables about who would someday own the company collide with shareholder rights, director duties and the need for liquidity. “We’re getting into these post-mortem evidence rules” at the same time as fighting over corporate control and the true nature of past transactions, she says.
Carlson cites the case of Ferguson Estate (Re), 2025 ABCA 94, as a recent example of these dynamics playing out. The case “highlights the difficulties that arise when estate administration is intertwined with closely held corporate assets, particularly where there is confusion about the underlying corporate structure,” she says. For years, the parties assumed there were two Oro Brazos companies, one Canadian and one American, when, in fact, there was a single Nevada corporation extraprovincially registered in Alberta. That basic error bled into the will, the accounting and the personal representative’s claim that the corporation was not part of the estate at all.
“The court rejected that position, confirming that the corporation formed part of the estate and that its income was to be shared equally among the beneficiaries,” Carlson explains. She has watched similar tensions freeze enormous sums in other files. She describes multimillion-dollar estates where, years after death, there is still “money sitting in lawyers' trust accounts waiting to be distributed out” while the court works through indemnities, arm’s length dealings and governance questions. The impact, she argues, goes well beyond family fairness: “It’s the drag on the economy to have … hundreds of millions of dollars being stuck in estate litigation.”
Those structural pressures are also reshaping how mid-sized firms organize themselves. Carbert Waite, a 35-lawyer litigation boutique, has merged its estate and commercial litigation groups and deliberately puts lawyers from both teams on big files so “we’re talking to each other,” Carlson says. The firm is funding mediation and arbitration training focused on these hybrid disputes, betting that private processes will increasingly be needed to break logjams before the underlying businesses lose value or fail.
On the estates planning side, Field Law managing partner and wills and estates lawyer Farha Salim is trying to prevent such fights from starting. “A large aspect of my practice on the estate planning side is doing estate planning that coincides with business succession planning,” she says. Her clients are often founders or multi-generational families with operating companies in sectors from land development to oilfield services, and she estimates typical enterprise values in the “10 to 100 plus million” range.
Salim structures most mandates as joint projects with a corporate colleague. She handles wills, estates and trusts, while business lawyers handle reorganizations, shareholder agreements and corporate governance. External tax advisers are pulled in as needed. The aim is to address valuation, control, and shareholder loans while the original owners are alive and engaged, rather than leave those questions to a court applying post-mortem evidence rules.
Even then, she says, private company shares are stubbornly hard to price. Formal valuation demands specialist evidence that is costly and slow, and there is plenty of room for “conflicting views of the appropriate valuation of a company,” she says. Shareholder loans create another pressure point when the estate needs cash, and the corporation cannot repay without jeopardizing jobs or bank covenants, leaving executors squeezed between beneficiaries demanding distributions and boards insisting on balance-sheet discipline.
The shareholder agreement, when it exists, is not always helpful. Many were drafted to manage the founders’ relationships with each other, not to govern the rights of heirs who have never worked in the business. A typical agreement may set out buy–sell mechanics and shotgun rights for living owners, yet say little about how those rights are meant to operate when an estate becomes the shareholder. The complete absence of an agreement can be an even more significant gap.
Carlson expects these hybrid files to keep growing as more wealth rolls through private corporations and large estates collide with slow estate processes and corporate law remedies, driving demand for judges and mediators who understand both. Salim sees the same shift from the planning side, saying her work in this area has grown significantly over the last 10 years because “the demand is there in the market and the nature of the client’s needs are changing,” with firms like hers expanding wills and estates groups to match. Together, their practices point to a future in which integrated estate–corporate expertise becomes a core part of how mid-sized firms serve business-owning families.
