May 14, 2019
If you own an interest in a closely held business, it’s critical to have a properly executed buy-sell agreement. Without one, an owner’s death can have a negative effect on the surviving owners. Estate tax liability can bring about a forced sale of the business if your estate is large enough and your family lacks liquid assets to satisfy the tax liability. A buy-sell agreement permits the remaining owners to buy the interest of an owner who dies, retires or otherwise leaves the business. In the case of death, the buyout typically is funded by life insurance, which provides a source of liquid funds to purchase the deceased owner’s shares and cover any estate taxes. Contact us with questions.