Buy-sell agreement design and funding
A buy-sell agreement sets out what happens to an owner's share if a partner dies, becomes disabled, divorces or leaves. We help design the agreement with your attorney and fund it with the right life and disability coverage.
Attorney and CPA collaboration · Life and disability buyout funding
What happens without a funded agreement
When a partner dies, becomes disabled or wants out and there's no funded buy-sell, the remaining owners can face forced sales, deadlock or dissolution. Three illustrative examples:
A 50/50 partner dies suddenly
One partner in a $7 million manufacturing company dies at 54. There is no buy-sell agreement and no life-insurance funding. The widow wants $3.5 million for the 50% interest but has no interest in running the business; the surviving partner can't raise the money, banks won't lend without both guarantees, and she threatens to sell to a competitor. Clients leave and both sides hire lawyers.
Illustrative example. Real outcomes depend on the facts and your policy terms.
What a complete buy-sell agreement covers
Agreement drafting
A binding agreement setting triggering events (death, disability, retirement, voluntary exit, divorce, bankruptcy), purchase obligations and each party's rights.
Restrictive transfer provisions
Right of first refusal, prohibited transfers and limits on sales to competitors or outsiders.
Divorce and bankruptcy triggers
Mandatory buyout when an interest passes through a divorce settlement or bankruptcy.
Retirement and voluntary exit
Notice periods, transition duties, non-compete terms and phased buyout schedules for planned departures.
Deadlock resolution
Mediation, arbitration, shotgun clauses and forced-sale provisions that prevent paralysis during disputes.
Valuation formula
Fixed price, formula, independent appraisal or a hybrid, chosen to prevent disputes.
Payment terms
Payment schedules, typically three to seven years with interest and security, balancing the departing owner's needs with the business's cash flow.
Annual valuation updates
Scheduled reviews so purchase prices stay current and insurance keeps pace with value.
Life-insurance funding
Cross-purchase, redemption or hybrid ownership of policies to provide liquidity without draining cash flow or forcing asset sales.
Disability buyout insurance
Coverage that triggers after 12–24 months of total disability and pays a lump sum or installments to buy out the disabled owner.
Cross-purchase or redemption
Analysis of whether the owners or the entity should buy the departing interest, considering basis step-up and tax consequences.
Tax planning integration
Coordination with your CPA on agreement structure, policy ownership and payment terms.
From design to annual review
Coordinate with your attorney
We work directly with your business attorney so insurance funding matches the agreement terms and entity structure.
Set the valuation approach
We help you choose a valuation formula that is simple enough to administer and accurate enough to reflect the business's value over time.
Fund the agreement
We quote life and disability buyout coverage from multiple A-rated carriers and manage applications, underwriting, policy delivery, ownership and beneficiary designations — including partners with health issues.
Review every year
Annual reviews keep coverage in line with business value and the agreement current with the partners' goals.
Experience across every ownership structure
Buy-sell experience
Since 1992 we've designed and funded buy-sell agreements for two-person partnerships, multi-partner professional firms and family businesses.
Funding structures
Cross-purchase, entity redemption, wait-and-see and hybrid arrangements, structured for tax-efficient funding.
Advisor coordination
We work with your attorneys, CPAs and financial advisors so legal documents, policies and tax strategy fit together.
Disability buyouts
Disability buy-sell coverage, an often-overlooked piece that provides liquidity when a partner can't work.
Estate planning alignment
Agreements aligned with each partner's estate plan, trusts and family goals.
Underwriting support
Carrier relationships and underwriting experience that help secure approvals for partners with health issues.
Protect your partnership
Schedule a confidential consultation to design your buy-sell agreement and put the right funding in place.
Descriptions are general summaries for education. They are not tax, legal or investment advice, a statement of coverage, an offer or a binder. Scenarios and dollar figures are illustrative examples, not representations about any business. Buy-sell agreements should be drafted by your attorney and reviewed with your CPA. Coverage is governed by the policies issued and is subject to underwriting.