Buy Sell Agreement

A buy-sell agreement is a valuable business planning tool. Here are some important reasons for having a written buy-sell agreement, securely in place.

For example, if we unfortunately lost you tomorrow, your family and business heirs would have financial needs, which they must deal with, while mourning your loss. Here are some possible needs:

• Top dollar for their interests within the business
• Prompt settlement of the estate
• Set value of business for estate tax purposes
• Relief of worries, regarding the business and its creditors

And here are some financial needs that would confront your surviving partners:

• Minimum cost for their interest in the business
• Prompt transfer of the business interest
• Full control of the business - no interference from family members
• Continuing line of credit
• Rretention of customers and employees

What happens without a buy-sell agreement?

Now, what if you don't create a written buy-sell agreement? What if you decide a buy-sell agreement is too complicated and not worth your trouble? Well, here are the potential problems if we lose you, while no written buy-sell agreement is in place:

• Heated conflicts among the surviving business owners and your family
• Unhappiness on all sides, and sometimes litigation
• Delays in settling the estate and continuing business growth
• Loss of customers
• Possible liquidation of the business which may bring less than full value

A written buy-sell agreement can avoid these troubles and can allow an orderly transfer of the business, upon mutually agreeable terms of sale. Indeed, a buy-sell agreement can keep everyone—family members, partners, customers, staff, creditors, investors, and the IRS—satisfied.

One last thought... a buy-sell agreement can be drafted prior to a crisis, making it the very heart of succession planning. So, should you have a buy-sell agreement? Of course!

About the Author

Steven H. Kobrin, LUTCF, is an independent life insurance broker and nationally recognized expert in field underwriting for people considered high risk. He currently serves as a preferred life insurance quote provider for professional advisors and their clients, including attorneys, accountants, financial planners, and business loan officers.

Consumers and consumer advocates are warmly invited to contact Steve for his experienced and patient guidance.

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Email: skobrin@stevenkobrin.com
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