In the best of worlds businesses would be worrying less about what the government is going to do
to them next and more about business succession, how a company survives the death of a partner,
shareholder, key person or owner.
If you are in a partnership or closely held company and don’t have a funded buy/sell agreement in place
you have no idea what is going to happen if you, your partner or partners are going to do if one of you
doesn’t show up to work tomorrow. The family of the deceased has a legal right to that partner’s share
of the company and in the absence of some pre-arranged agreement the family has the right to take
over for that partner if their share can’t be purchased at a fair market value by the surviving partner(s).
It doesn’t take long for partners to see two things when we talk, 1. They would like an alternative to
having a new partner that they don’t even know they can work with and 2. It seems like a great idea to
have the life insurance in place to purchase the deceased partner’s share of the company.