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  • Writer's pictureMark W. Boslett

A Buy-Sell Agreement For The Living

Is your buy-sell agreement sufficient to cover the events that may affect your life? What happens if you get divorced or disabled? What if there is a bankruptcy or you want to retire? Do you and your partners have an agreement in place to cover these issues?

If not properly handled your partner’s spouse could get a portion of the stock in your company in a divorce decree. Do you want to be partners with this person? If not, make proper provisions in your buy- sell agreement to spell out specifically what happens in the event of a divorce.

Another provision necessary for a buy-sell agreement in a lifetime transfer is a predetermined price and a first right of refusal in the event an owner wishes to exit. This value should be arrived at by a Business Valuation prepared by a Certified Valuation Analyst. It should be based on the Fair Market Value at the time of the event.

Most buy-sell agreements are very good at funding the cross purchase of the business with a sufficient amount of life insurance in the event of a death or a disability of an owner. However, few owners (or their financial advisers) give much thought to what happens in a lifetime transfer of a business. Yet, most transfers occur during the owner’s lifetime.

Working with a professional can help ensure your business is prepared for whatever life events may happen. Contact us today to see how we can help. 

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