Breaking through Deadlock! Possible tie breaking mechanisms for business and estate planning purposes
As the old saying goes, “Two heads are better than one.” There are many great reasons to have multiple people involved when making decisions for your organization or even when administering your estate. However, it must be accepted that no two individuals will always agree on everything.
Whether these people area acting as co-executors for an estate, members in a limited liability company, or partners in a partnership, it is essential that a procedure for resolving deadlocks and tie votes is included in the underlying documents. Read below for a summary of possible tie breaking mechanisms that you can use.
A. One Person as the Controlling Vote
When there are an even number of decision makers, one of these people can be designated as the controlling vote. Such power should usually be provided to the highest-ranking member or partner or perhaps the one who has made the greatest financial contribution to the organization. For estate planning situations with family members, perhaps the oldest person could serve as such vote.
However, allowing one person to serve as the tie breaker can lead to an imbalance of power and make the other members or agents feel that they lack true control as they could possibly be out voted on many major decisions. With just two people serving, this would definitely not be the best tie-breaking procedure.
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