Buy-Sell Agreement

Protecting your business is an essential part of preserving your estate. When an active shareholder in a business can no longer participate in the business, other shareholders need to have a plan in place to continue the business.  

A Buy-Sell agreement ensures that money is available to buy a deceased partner’s share of the business, using life insurance as the vehicle to fund this purchase. This can be an important part of the business owners’ estate plan and business continuity plan. With an effective Buy-Sell agreement in place, the heirs will receive financial benefit without causing financial hardship and allow the remaining partner to continue the business without interruption.

The strategy involves a joint first-to-die insurance policy and a completed Buy-Sell agreement, drawn up wit the help of a lawyer. A Buy-Sell agreement is like a “business will” and is a written legal document. Along with your advisor, a lawyer and accountant also need to be part of the team when setting up the agreement.

People often delay buying life insurance, thinking they can buy it later. Most life insurance is medically and financially underwritten, which means your eligibility to purchase life insurance along with the amount of protection you can purchase are based on your current health, medical history and ability to pay. If your health deteriorates or as you age, you may find it difficult or expensive to purchase life insurance. Having a Buy-Sell agreement in place while your health and business are strong is an essential part of good business planning.

To learn more about enhancing your business, visit or call us at SASCU Wealth.