If you have business partners, you need a Buy-Sell Agreement. It dictates exactly what happens if a partner dies, and funding it with life insurance ensures the cash is there to execute the plan.
Without a funded buy-sell agreement, if your partner dies, their spouse inherits their shares. Do you want to be in business with your partner's spouse? Probably not. And the spouse probably just wants cash.
Life insurance provides instant liquidity. If Partner A dies, Partner B uses the tax-free insurance money to buy Partner A's shares from the medical spouse. The spouse gets cash; you get full control of the business.
Each partner buys a life insurance policy on the other partner(s). Best for businesses with 2 or 3 partners. It gives the surviving partners a "step-up in basis" for tax purposes.
The BUSINESS itself buys a policy on each owner. When an owner dies, the business buys back the shares to retire them. Easier to manage if there are 4+ partners.
You draft the legal agreement; we provide the funding vehicle to make it work.
Secure the future of your partnership.
Yes. We strongly recommend having a lawyer draft the actual Buy-Sell Agreement. Our role is to provide the life insurance policies that provide the cash to FUND the agreement.
There are several methods (fixed price, formula, or professional appraisal). The agreement should specify how the price is calculated. We just need a general idea to set the insurance death benefit amount.