Buy/Sell Agreements
Buy-sell agreements are used to help maintain the control and value of a business in the event that an owner dies. The agreements provide that the estate of an owner who dies will be paid fair value for his/her interest and that the surviving owners will maintain control and ownership of the business. Life insurance on the owners can provide the tax-free money to fund these agreements.
Key person insurance is similar to a buy sell agreement, except the insurance is meant to replace the value a key employee provides, rather than pay off an ownership stake. Just as a business insures physical business assets such as buildings, inventory, plants and equipment it is important to protect profits. A practical example would be a business purchasing a life insurance policy on a key salesperson or manager which would provide income that could be used to find another salesperson, as well as replace the profits generated by the deceased employee.
Please contact us today to schedule an appointment with one of our professional consultants to discuss a buy-sell agreement or key man insurance, or to review your current plan to ensure it meets your present and future needs.
