Business owners with multiple young partners face a 40% chance a partner dies and 70% chance of disability before retirement. Without a buy-sell agreement, surviving owners must keep paying the disabled or deceased partner's estate until they can afford a buyout. Insurance-funded buy-sell agreements lock in terms upfront so the business can buy out a partner's share without draining cash.
Chapters
In any business with at least 2 owners under the age of 50, there's almost a 40% statistical probability that one of them will die before they retire, and almost a 70% probability that one of them will be disabled before they retire. Of course, with more than 3 owners, the probability is even higher. But here's the real problem: if one of your business partners dies or is disabled by cancer, a heart attack, or a traffic accident, They are still entitled to the same share of your company's growth and profitability until you buy out their interest. But how much will you be obligated to pay for their share of the business? And more importantly, where will you get the money to buy them out? What's the solution? A legally binding contract between the partners stipulating the terms and conditions under which each of you agrees to be bought out If any one of you should die or be permanently disabled, even if one of the owners decides to retire or leave the company. The solution is—