Buy / Sell Insurance - Financial Advisory

Buy / Sell Insurance

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Buy / Sell Insurance

An integral part of any succession plan is to ensure that financing is in place to fund the purchase and sale of the business interest if an owner dies.

 The succession plan should also provide the business owner with sufficient liquidity to fund the related income taxes and, where possible, take advantage of any tax deferral or tax minimization strategies that may be available. A key component of an integrated financial plan is planning for business succession. The business interest often accounts for a substantial portion of the wealth the business owner has accumulated. Ensuring that a plan is in place for the eventual transfer of the business interest will help the owner realize full value for the business interest and it will also help the business and the remaining owners survive the transition.

This is particularly true if one of the owners dies prematurely. A buy-sell provision is a shareholder agreement that allows for the orderly transfer of shares in the event of disability, death or retirement. Upon the death of a shareholder, a buy-sell provision is a shareholder agreement that allows for the orderly transfer of shares in the event of disability, death or retirement.

Upon the death of a shareholder, the buy-sell agreement instructs your corporation to purchase the shares of the deceased. Insurance is a cost-effective way of providing the necessary funds to purchase the shares in the event of your shareholder’s passing. The buy-sell agreement instructs your corporation to purchase the shares of the deceased.