If you’re in business with a partner or partners, what happens if one of you dies, becomes disabled, departs the business or there is a dissolution?
Without a buy-sell agreement in place, the remaining partner could be left in business with a surviving spouse, an unwanted third party who doesn’t know the business, or be forced to sell when he or she is unable to come up with the money to buy out a departing partner, says Douglas Sockman, CFP, ChFC, CLU, a financial adviser with Skylight Financial Group.
“If you don’t have a buy-sell agreement in place, you need to consider getting one,” says Sockman. “And if you have one in place but it hasn’t been reviewed in recent years, or you haven’t considered how to fund the agreement, that needs to be addressed as well.”
Smart Business spoke with Sockman about how to create a buy-sell agreement, what areas should be addressed and how to fund it to help ensure you can follow through on its terms without bankrupting the business. Read the full article in Smart Business.