​Benefits of a Buy-Sell Agreement

Buy-sell agreements can be extremely beneficial, especially for a small or family-owned business. If structured properly, they can address and help eliminate potential problems or issues before they arise.

A well-thought-out buy-sell agreement spells out/offers you:

• A known buyer for your business following your planned (or unplanned) departure from the business.
• A known purchase price, allowing you and your family to plan for the future with confidence.
• Estate liquidity in the event of death to help pay state and federal taxes, debts and other estate settlement costs.
• Business value for estate tax purposes, allowing you to plan in advance how your estate tax liability can be paid.
• Stability. By knowing who will lead your company forward, those who depend on your business (your employees, customers, suppliers, creditors, etc.) will feel more secure and be more likely to stay with the company.
• Improved access to credit. Banks and other lenders will be more comfortable extending credit if they know the future of the business is secure.
• Greater retirement security. By knowing how much money you will receive at retirement, including when and from whom, you can begin planning for retirement on your terms without having to depend on the business for ongoing support.