Under the automatic accrual agreement, what happens to shares when either Sam or Ellie dies?

In the context of an automatic accrual agreement, when either Sam or Ellie dies, the shares owned by the deceased shareholder typically pass to the survivor. This arrangement is designed to ensure that the ownership of the company remains within the functioning members and does not become entangled with the deceased's estate or outsiders.

The purpose of this type of agreement is to prevent potential issues that could arise from having a deceased shareholder's interests represented by their estate or heirs, who may not have the same level of interest, commitment, or understanding of the business. Thus, transferring the shares to the survivor helps maintain continuity and stability within the company.

This choice aligns with the main objectives of such agreements, which favor simplicity and clarity in ownership transitions upon a shareholder's death.