Estate Planning Pitfall – You don’t have a buy-sell agreement for your business

Description

Abstract: Without a well-designed, properly funded buy-sell agreement, an owner’s death can have a negative effect on the surviving owners. A buy-sell agreement requires (or permits) the company or the remaining owners to buy the interest of an owner who dies, becomes disabled, retires or otherwise leaves the business — thereby avoiding negative tax implications and possible squabbles among the survivors. This article notes that there are two basic types of a buy-sell agreement.