A business buy/sell agreement protects surviving/remaining business owners who have a stake in a company should one or more of the owners become disabled, retire, or pass away. These agreements are typically written up by an attorney and outline the distribution of ownership to remaining owners when an individual leaves. Life insurance is a common cost-effective way to fund a business buy-sell agreement and allows for the outgoing individual’s ownership of a business to pass to the remaining owners. The insured’s benefit is used by the remaining owners to buy-out the outgoing owner’s heirs/family. A buy sell agreement helps the business to continue while at the same time supply the outgoing owner’s family members a pay-out for their share of the inherited business stake.
