If you choose to draft a buy-sell agreement with your co-owner, you’ll want to make sure a life insurance policy is stipulated in the agreement.
We recommend speaking with an expert for specific help on the type of policy you’ll need.
This type of agreement can help ease the burden of an unexpected transition— for the business and family members alike.
A spouse might be interested in keeping their shares, but may not have the time investment or experience to help it blossom.
If a purchase is involved, the sale price and purchase terms are also clearly outlined, relieving some of the stress for the departing owner’s family.
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In other words, a well-crafted succession plan aims to benefit everybody— the departing owner, their family, the business and the successor.
Term life insurance is relatively inexpensive, and can offset a lot of costs in the event of an owner’s death.
Permanent life insurance is a bit more expensive, but can likewise payout in the event of retirement or disability.
Business succession planning is a series of logistical and financial decisions about who will take over your business upon retirement, death or disability.
To write a succession plan, the first step is to identify the ideal successor to take over the business, then determine the best selling arrangement.