Buy/Sell Agreements
Buy/Sell Agreements: Protecting Business Partnerships
Understanding Buy/Sell Agreements
A Buy/Sell Agreement is a legally binding contract between business co-owners that establishes what happens to a partner's share of the business if they die, become disabled, or leave the company. Life insurance is the most common and effective way to fund these agreements, providing immediate liquidity when it's needed most.
Without a properly funded Buy/Sell Agreement, the death of a business partner can lead to disputes with the deceased partner's family, forced liquidation of business assets, or an unwanted new partner. A funded agreement ensures a smooth, pre-determined transition that protects everyone involved.
Key Benefits at a Glance
Types of Buy/Sell Agreements
| Agreement Type | How It Works | Best For |
|---|---|---|
| Cross-Purchase | Each partner buys and owns a life insurance policy on the other partner(s). | Businesses with 2-3 partners. |
| Entity-Purchase | The business itself buys and owns policies on each partner, then redeems shares upon death. | Businesses with 4+ partners. |
| Wait-and-See | A hybrid approach allowing flexibility to choose cross-purchase or entity-purchase at the time of the event. | Maximum flexibility. |
Why Choose Anker Insurance for Buy/Sell Funding?
Structuring a Buy/Sell Agreement requires careful consideration of business valuation, tax implications, and the right type of life insurance policy. Our agents work alongside your attorney and CPA to ensure the insurance component is properly structured, competitively priced, and aligned with the legal agreement.
Ready to Protect Your Business Partnership?
Don't leave your business succession to chance. Click below to start a conversation about funding your Buy/Sell Agreement, or reach out to one of our licensed agents for a free consultation.
