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A Buy-Sell Agreement is simply a written agreement made between the partner or shareholders of the business specifying buy out provisions caused by such things as death, disability, divorce, bankruptcy, voluntary termination, company dissolution, etc. The execution of a Buy-Sell Agreement helps secure a number of very tangible benefits for the shareholders, including:
- Continuity of management and control for the remaining owners
- A ready market for typically non-marketable business interests
- Liquidity to the decedent’s estate for estate taxes and administration costs
- A fair valuation of the business interest for federal estate tax purposes
- A fair return to the decedent’s estate for his/her business interests