Putting shares, subject to an option agreement, into trust


(mawallace44) #1

A company is owned by two shareholders and some time ago they signed a cross option agreement that allows the other to buy the other shareholder’s shares opon their death.

One of the shareholders wants to put these shares into trust for the benefit of his wife.

As I see it if he does this the ‘option’ agreement will remain in force (he will not tell the other shareholder) as he will be holding the shares as trustee. In the event of his death the trust would be paid for the shares.

Does this mean that he is unable to create the trust?

Mark Wallace
Walter Wright