Buy
Sell Agreements
A buy-sell agreement, also known as a corporate redemption agreement,
is a legally binding agreement between partners, or shareholders,
in a firm. It ensures a smooth transfer of ownership when one or more
of the partners has died, becomes disabled, retires, or leaves.
You can fund a buy-sell agreement by:
- Using current cash flows
- Creating a sinking fund
- Selling existing assets
- Borrowing against firm holdings
In the case of a buy-out due to death or disability, the most effective
funding option is the cross-purchasing of life and disability insurance
policies on the lives of the partners or shareholders.
By using insurance, you are helping to protect the firm's future
and guaranteeing payment of tax free funds upon death.
Please contact your W.P.G. representative for further information on the
structuring of a buy-sell agreement, and all your firm's insurance
needs.
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