Buy/Sell Plans

Every business owner needs a plan if they become disabled or pass away. This process is more complicated when a business has more than one owner. While it is probably not at the top of your “fun conversations” list, you need to talk about it and have a formal plan. Trust me, your family and beneficiaries will thank you.

 So, what do you need to think about, know, and plan for?

•  You need to have a formal, signed agreement that states what will happen if one, some, or all owners pass away or become disabled and are unable to serve their role in the company
  • Most companies would prefer to not have family members jump into the business just because a plan was not in place
• Make sure you plan for more than just death
  • Try to think through many scenarios and draft a document that protects the company from even low-probability events
•  Is your Buy/Sell funded? 
  • This means you have a plan in place to execute the plan if something happens
  • Your plan could be a life insurance policy for the death of an owner or a disability policy of some form
  • Or, you can write the agreement in such a way that allows the company to pay off the agreement over time with cash flow from the business

 There are a lot of strategies and considerations. Reach out to our team at Legacy if you have questions about your planning. 

Who Not How 

By: Dan Sullivan