Buy/Sell Agreement
Do you own your own business with one or more partners? Have you considered what would happen to the business - especially your share - if you or your partner dies? How would your business survive? How would you protect your family’s interest in your share? They are few problems you could face. You are now in business with your partner’s heirs - his wife, his children, a distant relative or friend. Or, if your partner dies with no heirs, your new partner is the state. At the death of any of the partners, the business may have to suspend operations until the deceased’s estate can be settled.
Solution:
A buy/sell agreement, funded with life insurance.
Example:
Two owners run a $10,000,000 business as equal partners. They have a buy/sell agreement drafted that gives each the right to buy out the other’s share in the event of the their death. To guarantee that funds are available to execute the agreement, they take out life insurance, usually term insurance plans (cheapest premiums). Owner A buys $5,000,000 of life insurance on Owner B and vice versa. No matter which owner dies, the remaining owner has $5,000,000 immediately in cash to purchase the other’s half of the company, thus insuring that the company continues its business operations uninterrupted and under control of the original remaining owner.
Contact us for a complementary, no obligation analysis of your personal situation and a proposal on how best to implement this program to maximize the value of your annuities for your heirs should it be appropriate for your estate planning needs.