The 4 W’s Of A Buy-Sell Agreement

As a business owner, you put into a place many different systems that protect your business and your family. But what have you done to prepare your business for the idea that you may one day not be around. Just as you invest in insurance policies to protect yourself, your home, or your car, a buy-sell agreement protects the future of your business should you pass away and be unable to operate it.

What Is It?
To be more specific, a buy-sell agreement is a legal document that outlines how a business owner or in many cases, a business partner’s shares of the business will be handled when he or she dies or chooses to leave the business. This type of legal document is often drawn up because a business owner’s assets are set to be distributed to his or her next of kin. In the case that those individuals are not prepared to or not interested in taking on the running of the business the agreement ensures that the business will survive by passing it along to another designated person.

Who Needs One?
If you are a business owner with an established business, clients, and employees, it’s wise to go through the process to set up a buy-sell agreement. It is especially important to make legal arrangements of this kind when you’re a partner in a business. This ensures that your business and your partners are protected in case of your passing.

When Should You Get One?
There’s no time like the present! This isn’t exactly something you relish thinking about, but the truth is anything could happen and all aspects of your estate management should be handled sooner rather than later. It’s wise to have clear and formal conversations with your family and business partners so they know what responsibilities they have upon your passing.

Where Do You Start?
Don’t let the idea of preparing for your own death overwhelm you. Just as you wouldn’t want to leave your family in the lurch, it’s important to do what’s necessary to protect your business as well. You should always work directly with a professional to make any kind of legally binding agreements, handshake arrangements may be easier and more comfortable, but at the end of the day, they’re unofficial at best.

You’ve worked too hard building your business to leave it all to chance at the end of your life. If you want to do right by your family, your business, and any business partnerships you should start today by working with an experienced professional to devise a buy-sell agreement. If you’re unsure where to begin, give us a call today. We’re available to walk you through the process.