Plan Ahead with a Buy-Sell Agreement
Continuation of your business, the way you choose, is possible. Many times, when partners go into business, the do no consider how to arrange for a smooth transition if one of the partners leaves the business retires or becomes unable to work.
Buy-Sell Planning can help you:
- Be assured your family and partners’ families will be taken care of
- Reassure your employees of a smooth transition.
- Know the deceased partner’s share of the business will not be left to someone incapable of running the business.
Buy-Sell planning using life insurance is designed to address the concerns of business owners and their families. Here are only a few of the benefits:
- It prevents a situation where the surviving spouse or other beneficiary of the estate gains control of the deceased’s interest without wanting it, or without having the business skill to manage it.
- It provides cash for the spouse or estate of the deceased owner to make up for lost income from the business.
- It makes it less likely that the business will have to be sold to “buy out” the interest of the deceased owner.
Business owners typically fund buy-sell agreements by purchasing a life insurance policy on each owner. Depending on how the agreement is drawn, the other owners can be the beneficiaries, in which case they will have the funds to meet their obligations under the contract. In other cases, the company itself is the beneficiary, to provide funds to buy back the interest of the deceased owner.
Buy-sell agreements can also be triggered by disability, retirement or simply by one owner wishing to leave.
Contact the experts at Cobb-Hall to provide innovative solutions designed specifically for your needs.
Sited: Trusted Choice-Independent Insurance Agents 2017