How well do you like your business partner's spouse & children? I hope you like them a lot, and let’s hope they are pretty versed in your business because without proper planning you will be in business with the spouse and children, if something happens to your business partner.
There are several ways to utilize life insurance to ensure you’re able to continue to run the business if something happens to your business partner unexpectedly. The most popular plan is the Buy-Sell Agreement, there are multiple uses of the Buy-Sell Agreement.
The Buy-Sell Agreement is a binding contract for the buyer to purchase the business as a “going concern” and is triggered upon the death of the sole proprietor or some other event such as retirement, as stated in the agreement. Upon the death of the sole proprietor, the Buy-Sell Agreement obligates the buyer to purchase the business from the estate, and requires the estate to sell the business to that buyer. Buy-Sell Agreements are a big alternative to liquidation of the business for one who wishes the business would continue upon their departure from the business.
There are several Buy-Sell Agreement options, so be sure to do your homework when deciding which option to go with. Make sure this is the plan you want for your family, and not just what someone has recommended to you. We tend to trust people too much, and this can bite you later when it’s most important. Work with a trusted consultant who will put your best interest first by answering all of your questions, and demonstrating how it will fit your wishes, allowing you to be enlightened on the best choice for you, and your
We will talk more about the benefits of this plan on another blog.
Contact Swain Consulting for more information on how to build a business succession plan for you and your partners. Go to www.swainconsultingllc.com.